Outside Directors on the Board, Competition and Innovation

We investigate the influence of non-executive outside directors on firms' innovative performance for a sample of 1,393 listed firms in the EU-15 member states plus Norway and Switzerland in the period 2005 to 2010. Our results show that the fraction of non-executive outside directors on the board is associated with a significant decrease in the number of patent applications if competition in the market is low. This may indicate that restrictive...