Managers and (Secret) Social Networks: The Influence of the Freemasonry on Firm Performance

38 Pages Posted: 31 Mar 2008 Last revised: 2 Jul 2011

See all articles by Fabio Braggion

Fabio Braggion

Tilburg University - Center and Faculty of Economics and Business Administration; Tilburg University - European Banking Center

Date Written: October 24, 2009

Abstract

This paper studies the impact of managers' affiliations with Freemasonry on companies' performances. Using a unique data set of 412 companies quoted on the London Stock Exchange between 1895 and 1902, I find that young and small firms run by Masonic managers exhibited larger leverage ratios. These companies earned higher profits, though the effect is not statistically significant. Large publicly quoted corporations that were managed by Freemasons, instead, had lower profits and lower Tobin's Q. I discuss the issue of endogeneity of Freemasonry membership and use four different approaches to partially address it.

Keywords: Freemasons, Social Networks, Access to Credit

JEL Classification: G30, G39, N23

Suggested Citation

Braggion, Fabio, Managers and (Secret) Social Networks: The Influence of the Freemasonry on Firm Performance (October 24, 2009). Available at SSRN: https://ssrn.com/abstract=1114043 or http://dx.doi.org/10.2139/ssrn.1114043

Fabio Braggion (Contact Author)

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg University - European Banking Center ( email )

PO Box 90153
Tilburg, 5000 LE
Netherlands

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