Grossman, Imai Study Effects of Prominent Directors on 19th Century British Banks

Richard Grossman, professor of economics, and Masami Imai, professor and chair of economics, professor of East Asian studies, are the authors of an article published January 2016 in Explorations in Economic History. 

The article is titled “Taking the lord’s name in vain: The impact of connected directors on 19th century British banks.” Grossman and Imai considered the appointment of prominent, well-connected individuals (former members of Parliament and lords) to the boards of directors of banks in pre-World War I Britain, and investigated whether their presence enhanced equity value for bank shareholders. Surprisingly, they found that these individuals actually had negative effects on bank equity returns.

The article is available online to read for free until February 2016.