Information Cost, Outside Director Reputation and Corporate Performance

摘要

Reputation is an important incentive mechanism of outside directors. Reputation mechanism is influenced by information costs. Information costs will affect the outside directors to obtain information, aggravate information asymmetry,and influence the functions of outside directors and then further influence corporate performance. This paper constructs a model of reputation incentive and information cost,and uses unbalanced panel data of 2005-2007 to make empirical research. The results show that: Information costs were significantly negatively correlated with corporate performance; The lower information costs of corporate are,and the better the reputations of outside directors in the corporate are, the better the corporate performance is; Adopting the quantity of total jobs for the proxy variable of outside director's reputation can get good effect of regression; The lower information costs of the company are, the better the reputations of outside directors in the company are.