Pandej ChintrakarnPornsit JirapornShenghui TongRichard M. ProctorMahidol UniversityPennsylvania State UniversityCo., LtdSiena College2018-12-212019-03-142018-12-212019-03-142017-06-25Applied Economics Letters. Vol.24, No.11 (2017), 766-77014664291135048512-s2.0-84986184210https://repository.li.mahidol.ac.th/handle/123456789/42490© 2016 Informa UK Limited, trading as Taylor & Francis Group. Motivated by agency theory, we investigate the effect of board size on corporate outcomes. To address endogeneity, we exploit the variations in the director-age populations across the states in the US. We argue that firms with access to a larger pool of potential directors tend to have larger boards. Consistent with this notion, our empirical results show that firms located where the size of the director-age population is larger have significantly larger board size. Because the director-age population represents broad demographic trends outside of any firm’s control, it is unlikely related to firm outcomes or policies and should be exogenous. Using the director-age population as our instrument, we estimate the effects of board size on firm value and profitability. Our approach is less vulnerable to endogeneity and is more likely to show a causal effect.Mahidol UniversityEconomics, Econometrics and FinanceArticleSCOPUS10.1080/13504851.2016.1226484