Previous research on firm performance does not adequately account for the interrelatedness of a firm’s professional connections, political ties, and family business-group affiliation. Many widely-cited findings may therefore be subject to confounding bias. To address this problem, we adopt a holistic approach by assembling a new dataset covering professional, political, and family networks for 1,290 large East Asian firms. We find that professional networks buoyed performance during the 2008 financial crisis; political and family networks did not. We provide evidence that information access is a key mechanism underlying the effect of professional networks. A one standard deviation improvement to a firm’s professional network position cushioned the fall in quarterly ROA by approximately 35% during the crisis. (joint with Richard Carney)
PhD Lunch Seminars Amsterdam
- Speaker(s)
- Travers Child (VU Amsterdam)
- Date
- Tuesday, 21 March 2017
- Location
- Amsterdam