This study examines the resource dependency and signalling role of independent directors from the perspective of institutional investor’s and also investigates if the presence of large blockholder moderates the signalling effect. This study uses the quasi-natural experiment to examine this relationship. The difference-in-difference (DiD) analysis of 5,298 firm observations covering 618 National Stock Exchange (NSE) listed Indian firms for the period 2001–2011 provides empirical evidence that board composition does matter to institutional investors. We find that non-compliant firms who adopted the board independence requirement experience a significant increase in institutional ownership relative to previously compliant firms. We also find that institutional investors have invested more in family-owned firms during post-mandate period compared to government-, private- and foreign-owned firms. Overall, this study contributes to the existing literature on resource dependency theory and signalling theory and shows that the board independence acts as a signal to institutional investors and decreases the agency cost and cost of monitoring. JEL Codes: G3, G11, G34, G38, G23

中文翻译：

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董事会组成对机构投资者重要吗？

这项研究从机构投资者的角度考察了独立董事的资源依赖和信号传导作用，并调查了大股东的存在是否会缓解信号传导效应。本研究使用准自然实验来检验这种关系。2001年至2011年期间对618家在美国证券交易所（NSE）上市的印度公司的5298项公司观察结果的差异分析（DiD），提供了董事会成员对机构投资者确实重要的经验证据。我们发现，采用董事会独立性要求的不合规公司相对于以前合规的公司而言，机构所有权显着增加。我们还发现，与政府，私人和外资企业相比，机构投资者在授权后时期对家族企业的投资更多。总体而言，这项研究为有关资源依赖理论和信号理论的现有文献做出了贡献，并表明董事会独立性是向机构投资者发出信号的信号，并降低了代理成本和监督成本。JEL代码：G3，G11，G34，G38，G23