Boardroom network and corporate governance : when who you know contributes to what you know
Name
1006378939-MIT.pdf
Description
Full printable version
Size
3.15 MB
Format
Adobe PDF
Checksum (MD5)
b53fd8d93d670bf8c433cb46b4f2967b
Author(s)
Abramova, Inna, S.M. Massachusetts Institute of Technology
Advisor(s)
John E. Core and Rodrigo S. Verdi.
Date Issued
2017
Publisher
Massachusetts Institute of Technology
Abstract
In this study, I examine whether boardroom centrality has a causal effect on firm performance. If boardroom ties work as a conduit for information about market, industry, feedback on peers' experience, etc., then I expect central boards' corporate decisions to incorporate richer information and, as a result, become more efficient. Alternatively, if boardroom ties can put a firm at a disadvantage by disseminating proprietary information or conveying incorrect or misleading information, then I expect to find a deterioration in the central firms' performance. To isolate the effect of network centrality on the firm's performance, I use an instrumental variable approach based on director deaths at distant firms within the network. Contrary to the prevailing evidence in the literature, the results suggest that boardroom centrality deteriorates firm performance. To the best of my knowledge, this paper is the first to resolve the disagreement in the literature on the sign of the boardroom centrality effect on performance by using an exogenous setting that can rule out the selection and ability channels from the set of explanations for the results.
Description
Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, 2017.
Page 51 blank. Cataloged from PDF version of thesis.
Includes bibliographical references (pages 34-35).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
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