Paper presented at the IFABS 2015 Corporate Finance in Oxford


The paper “Travel Distance and Firm Valuation: International Evidence” by Marc Steffen Rapp, Thomas Schmid and Daniel Urban was presented at the IFABS 2015 Corporate Finance in Oxford.

Abstract: Board members often cover large travel distances when they simultaneously serve in several firms. Based on a novel board dataset covering 35,000 firms across 54 countries, we show that travel distance signals board member quality as we find that longer travel distances are correlated with higher firm valuation. This effect likely stems from superior matching between firms and board members, extraordinary skills and abilities, as well as higher boardroom independence. We further document that busyness on average reduces firm valuation. Distant board members, however, more than compensate for negative effects of busy board members.