The Emerging Effect of Outside Directors on the Financial Performance of Italian University Spin-Offs

The study of corporate governance is fundamental in university spin-offs (USOs) because their activities are characterized by fast growth but, jointly, a great risk of market failure cause their knowledge and technology-driven nature, which rise high information asymmetry between management and owners. Furthermore, it is noteworthy that corporate governance affects the performance of the firm.In this view, the paper investigates the effect of outside directors on the financial performance of USOs. Based on a sample of 418 Italian USOs over the period 2010-2014, the results show that outside directors are negatively associated with the financial performance of USOs. The evidence seems to reject the hypothesis that outside directors have a key and superior monitoring and advising role compared to internal directors.