Trainspotting: Board appointments in private firms

There is little evidence of how the supply side of potential candidates affects board appointments in private firms. This column exploits the gradual introduction of high-speed and high-comfort train services in Italy to examine whether access to a larger pool of talent improves the match between a firm and its directors. Easier access to non-local directors increases positive assortative matching between directors and firms – high-quality firms improve their boards’ quality, while low-quality firms reduce the quality. Moreover, director quality is positively associated with firm growth and productivity, and negatively associated with the probability of default.