Social Network and Firm Performance: An Empirical Analysis of Canadian Boards

27 Pages Posted: 10 Jan 2010 Last revised: 2 Jun 2010

See all articles by Saidatou Dicko

Saidatou Dicko

University of Quebec at Montreal (UQAM)

Gaetan Breton

University du Quebec at Montreal

Date Written: January 9, 2010

Abstract

Despite a still low level of theorization of firm’s management, we have some proposals pointing in the direction of an effect of the Board composition on the performance. The Resource based view of the firm would explain this relationship by the social capital (networks) of Board’s members. This study examines the influence of social relationships of board of directors’ members on the performance of the firm using a sample of the 100 largest listed Canadian companies. Social relationships are measured by three factors: economic affiliations, political affiliations and social affiliations. The performance of the firm is measured by the return on assets. The results of regression analysis suggest that only the political affiliations of board of directors’ members have a significant although negative impact on the performance of the firm. These results suggest that separating business and politics might be a good idea as politics appear to be harmful to business.

Keywords: board of directors, social network, performance, resources, firm

JEL Classification: M10

Suggested Citation

Dicko, Saidatou and Breton, Gaetan, Social Network and Firm Performance: An Empirical Analysis of Canadian Boards (January 9, 2010). CAAA Annual Conference 2010. Available at SSRN: https://ssrn.com/abstract=1533931 or http://dx.doi.org/10.2139/ssrn.1533931

Saidatou Dicko (Contact Author)

University of Quebec at Montreal (UQAM) ( email )

PB 8888 Station DownTown
Succursale Centre Ville
Montreal, Quebec H3C3P8
Canada
(514) 987-3000-3848 (Phone)

Gaetan Breton

University du Quebec at Montreal ( email )

P.O. Box 8888, Downtown Station
Succursale Centre Ville Department of Accounting Sciences
Montreal, Quebec H3C 3P8
Canada
514-987-3000 (Phone)
514-987-6629 (Fax)

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