Do Independent Directors’ Scientific Achievements Matter? Evidence from Over-Investment of Chinese Listed Firms

This study identifies restraining effects of scientist independent directors (SIDs) on firm over-investment. This conclusion remains robust after a two-stage Heckman test, a placebo test, and an instrumental variable test. The restraining effects mainly exist within a sample of SIDs with board committee positions, those without government official positions, and non-busy directors. We find that the restraining effects are stronger for firms in high-tech industries and among SIDs with greater scientific achievements and firm-related research directions, which implies an information transparency improvement channel of SIDs’ monitoring function