Abstract

http://ssrn.com/abstract=1121503
 
 

References (47)



 
 

Citations (24)



 


 



Corporate Finance Policies and Social Networks


Cesare Fracassi


University of Texas at Austin

December 2, 2015

Management Science, Forthcoming

Abstract:     
This paper shows that managers are influenced by their social peers when making corporate policy decisions. Using biographical information about executives and directors of U.S. public companies, we define social ties from current and past employment, education, and other activities. We find that more connections two companies share with each other, more similar their capital investments are. To address endogeneity concerns, we find that companies invest less similarly when an individual connecting them dies. The results extend to other corporate finance policies. Furthermore, central companies in the social network invest in a less idiosyncratic way, and exhibit better economic performance.

Number of Pages in PDF File: 40

Keywords: Corporate Finance Policy Decisions; Social Networks; Capital Investments

JEL Classification: G31, L14


Open PDF in Browser Download This Paper

Date posted: April 18, 2008 ; Last revised: December 22, 2015

Suggested Citation

Fracassi, Cesare, Corporate Finance Policies and Social Networks (December 2, 2015). Management Science, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1121503 or http://dx.doi.org/10.2139/ssrn.1121503

Contact Information

Cesare Fracassi (Contact Author)
University of Texas at Austin ( email )
Red McCombs School of Business
1 University Station B660
Austin, TX 78712
United States

Feedback to SSRN


Paper statistics
Abstract Views: 8,910
Downloads: 2,420
Download Rank: 3,457
References:  47
Citations:  24

© 2016 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollobot1 in 0.234 seconds