I Theme: Overlapping Directors and Corporate Synchronicity

II Speaker: Lu Yao, an associate professor from the Department of Finance in the School of Economics and Management, Tsinghua University. She acquired her doctorate in economics from the University of Michigan - Ann Arbor in 2009, before which she obtained her master's degree in statistics at New York University and was a bachelor of economics in Central University of Finance and Economics. Her main research areas include corporate finance, corporate governance, finance and law, as well as capital market development and internationalization. She has published more than ten papers in the Journal of Finance, Journal of Financial Economics, Journal of Corporate Finance, "Management World", "Finance Research" and other domestic and foreign academic journals. She received the Best Paper Award in the fifth International Conference of Asian-Pacific financial market in 2010, and several papers were received by Harvard University Corporate Governance Forum.

III Time: June 24, 2015 (Wednesday), 16:00-17:00

IV Venue: Meeting Room 913, Main Building

V Host: Huang Zhigang, Vice Professor from School of Finance, Central University of Finance and Economics

Abstract: With the data of Chinese publicly listed firms from 2000 to 2012, we find that both occurrence and intensity of overlapping directors can significantly increase stock price synchronicity between the pair of firms. These results are not driven by crossholding shares between the pair of firms and the fact that the pair of firms are in the same business group, and are robust to addressing the endogeneity issues with a dynamic panel GMM estimator and two-stage estimation with an instrument. We also investigate the channels for high stock price synchronicity and find overlapping directors can lead to firm investment and capital structure convergence. Moreover, we observe greater impacts of overlapping directors when the pair of firms are under weak information environment. Overall, our evidence suggests that overlapping directors serving as conduits for information sharing that leads to the spread of corporate policies and stock prices.