Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130483
Authors: 
Carney, Richard W.
Child, Travers Barclay
Year of Publication: 
2015
Series/Report no.: 
Tinbergen Institute Discussion Paper 15-135/V
Abstract: 
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.
Subjects: 
networks
political connections
interlocking directorates
family ownership
corporate governance
JEL: 
G3
G14
L14
Document Type: 
Working Paper

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