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dc.creatorFaia, Ester
dc.creatorMayer, Maximilian
dc.creatorPezone, Vincenzo
dc.date.accessioned2021-09-28T09:39:20Z
dc.date.available2021-09-28T09:39:20Z
dc.date.issued2020-04-13
dc.identifier.urihttps://fif.hebis.de/xmlui/handle/123456789/2375
dc.description.abstractThis paper presents causal evidence of the effects of boardroom networks on firm value and compensation policies. We exploit exogenous variation in network centrality arising from a ban on interlocking directorates of Italian financial and insurance companies. We leverage this shock to show that firms whose centrality in the network rises after the reform experience positive abnormal returns around the announcement date and are better hedged against shocks. Information dissemination plays a central role: results are driven by firms that have higher idiosyncratic volatility, low analyst coverage, and more uncertainty surrounding their earnings forecasts. Firms benefit more from boardroom centrality when they are more central in the input-output network, hence more susceptible to upstream shocks, when they are less central in the cross-ownership network, or when they have low profitability or low growth opportunities. Network centrality also results in higher directors’ compensation, due to rent sharing and improved executives’ outside option, and more similar compensation policies between connected firms. 
dc.relation.hasversionhttps://fif.hebis.de/xmlui/handle/123456789/2432?269_rev
dc.rightsAttribution-ShareAlike 4.0 International
dc.rights.urihttp://creativecommons.org/licenses/by-sa/4.0/
dc.subjectLaw and Finance
dc.titleThe Value of Firm Networks: A Natural Experiment on Board Connections
dc.typeWorking Paper
dcterms.referenceshttps://fif.hebis.de/xmlui/handle/123456789/1433?IBES
dcterms.referenceshttps://fif.hebis.de/xmlui/handle/123456789/1403?Eurostat
dcterms.referenceshttps://fif.hebis.de/xmlui/handle/123456789/1376?Compustat
dcterms.referenceshttps://fif.hebis.de/xmlui/handle/123456789/1534?CONSOB
dc.source.filename269_SSRN-id3552485
dc.identifier.safeno269
dc.subject.keywordsfirms’ networks
dc.subject.keywordsnatural experiment
dc.subject.keywordsexecutives’ compensation
dc.subject.jelD57
dc.subject.jelG14
dc.subject.jelG32
dc.subject.jelL14
dc.subject.topic1board
dc.subject.topic1brick
dc.subject.topic1median
dc.subject.topic2institutional
dc.subject.topic2centrality
dc.subject.topic2firm
dc.subject.topic3deviation
dc.subject.topic3daily
dc.subject.topic3ivol
dc.subject.topic1nameCorporate Finance
dc.subject.topic2nameSystematic Risk
dc.subject.topic3nameSaving and Borrowing
dc.identifier.doi10.2139/ssrn.3552485


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