We analyze the valuation effect of board industry experience and channels through which industry experience of outside directors affects firm value. Firms with more experienced outside directors are valued at a premium compared to firms with less experienced outside directors. Additional tests...

We investigate whether investor reactions to the announcement of a new outside director appointment significantly depend on the director’s experience in the appointing firm’s industry. We use a sample of 385 outside directors appointed to the board of S&P 500 companies from 2008 to 2010. Our...