Corporate Finance Policies and Social Networks

Fracassi, Cesare

doi:10.2139/ssrn.1121503

Cited by 94 publications

(96 citation statements)

References 40 publications

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“…Studies such as Cohen et al (2008) and Cai and Sevilir (2012) show that social connections lower the costs of gathering information and help reduce information asymmetry. Fracassi (2016) provides suggestive evidence that socially well-connected firms display superior operating performance and valuation.…”

Section: Summary and Discussionmentioning

confidence: 95%

“…Cohen et al (2008) focus on connections between mutual fund managers and corporate board members via educational networks and explicitly show that mutual fund managers invest more and perform better on the 'connected' stock holdings implying that social capital through social networks is an important mechanism for information flow into asset pricing. Other contemporaneous researchers (e.g., Engelberg et al, 2012;Fracassi, 2016;Hochberg, Ljungqvist, & Lu, 2007;Kuhnen, 2009) also suggest that information flows more freely and at a lower cost through the social networks.…”

Section: Social Capital's Channels Of Influencementioning

confidence: 98%

“…This dataset contains relational links between executives based on prior overlap in employment, education, and membership in non-profit organizations. Recent studies such as Fracassi (2016) and Engelberg, Gao, and Parsons (2012) employ this database to estimate corporate social connections. We use the BoardEx database to develop our CEO social capital measure estimated as the number of individuals with whom the CEO shares a common educational, employment, or social history.…”

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confidence: 99%

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An international analysis of CEO social capital and corporate risk‐taking

Ferris

Javakhadze

Rajkovic

2017

Euro Fin Management

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This study examines the effects of CEO social capital on corporate risk‐taking around the world. We document a significant positive relation between CEO social capital and aggregate corporate risk‐taking. Further, we find that CEOs with large social capital prefer riskier investment and financial policies. We also determine that the effect of CEO social capital on corporate risk‐taking is moderated by the extent of legal protections provided to shareholders, the financial development, and the culture of the country in which a firm is incorporated. Our results are robust to alternative proxies of risk‐taking, alternative model specifications, and tests for endogeneity.

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Section: Summary and Discussionmentioning

confidence: 95%

Section: Social Capital's Channels Of Influencementioning

confidence: 98%

mentioning

confidence: 99%

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An international analysis of CEO social capital and corporate risk‐taking

Ferris

Javakhadze

Rajkovic

2017

Euro Fin Management

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“…Companies with boards, which have strong social networks, tend to enhance company and shareholder value as well as individual director value (Horton, Millo, & Serafaim, 2012). It is understood that most of the time, directors choose not to perform studies or experiments, but prefer to rely on whatever information they have obtained through casual communication (Fracassi, 2012). A network between boards of directors from different companies may allow valuable information to flow through the network (Fracassi & Tate, 2012).…”

Section: Related Literaturementioning

confidence: 99%

Corporate Governance, Institutional Characteristics, and Director Networks in Malaysia

Jamaludin¹,

Hashim²

2018

AAMJAF

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“…The more centrally the firm is located, the more access it has to information and resources in the network (Granovetter 1985) (Walls and Hoffman 2013). The most recent empirical studies have linked director social networking profile to almost every important aspect of management and financial behaviour of firms, including shareholder value (Fogel et al 2014), corporate finance policy decisions (Fracassi 2015), firm value (Fracassi and Tate 2012) (Larcker et al 2013), CEO compensation (Hwang and Kim 2009) (Horton et al 2012), director appointment (Qi 2011) and mergers and acquisitions (Fracassi and Tate 2012).…”

Section: Resource-dependence Theory and The Provision Of Resource Funmentioning

confidence: 99%

The Effect of Board Roles on Firm Environmental Governance

Shahgholian

2017

Proceedings

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In recent years much attention has been paid to firms' environmental profile. Implementing and improving firm's environmental profile are twofold. First, launching the environmental governance is a foundation for firm's environmental profile. Second, the characteristics of board of directors directly affect the decisions made by board on all firm's performance. Drawing on the resourcedependence theory and agency theory, board characteristics represent board resource-provision role and board monitoring role.This paper aims to understand how the board monitoring and board resource-provision roles influence firm's environmental governance for 267 US firms from 2010 to 2012. The findings confirm that effective boards increase their monitoring of management when there are more independent directors on the board, higher CEO-chairman duality, higher share ownership for insiders and the CEO and finally lower share ownership for outsider-directors. Boards with strong social network connections, larger board size and lower board tenure are classified as resource-rich boards. The results also confirm that resource-rich boards with effective monitoring roles tend to have a board, or a committee appointed by the board that is responsible for environmental initiatives, paying incentives for the management of climate change issues, publishing information in annual reports, voluntary communications and other regulatory filings.

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Corporate Finance Policies and Social Networks

Cited by 94 publications

References 40 publications

An international analysis of CEO social capital and corporate risk‐taking

An international analysis of CEO social capital and corporate risk‐taking

Corporate Governance, Institutional Characteristics, and Director Networks in Malaysia

The Effect of Board Roles on Firm Environmental Governance

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