Productivity, Managers’ Social Connections and the Great Recession

62 Pages Posted: 19 Feb 2021

See all articles by Iftekhar Hasan

Iftekhar Hasan

Fordham University ; Bank of Finland; University of Sydney

Stefano Manfredonia

University of Rome Tor Vergata

Date Written: December 5, 2020

Abstract

This paper investigates whether managers’ personal connections help corporations to escape the productivity trap. Leveraging the heterogeneity in the severity of the GreatRecession across different sectors, the paper reports that (i) the Great Recession has a negative effect on corporate productivity, (ii) the effect is long-lasting and persistent, supporting a productivity-hysteresis hypothesis, (iii) the value of managers’ personal connections are counter-cyclical and indeed allow corporations to escape the productivity trap primarily via favorable credit conditions, in periods of high information asymmetries and tight credit constraints.

Keywords: Social networks, Great Recession, Productivity

JEL Classification: D85, G30, D24

Suggested Citation

Hasan, Iftekhar and Manfredonia, Stefano, Productivity, Managers’ Social Connections and the Great Recession (December 5, 2020). Available at SSRN: https://ssrn.com/abstract=3743348

Iftekhar Hasan

Fordham University ( email )

45 COLUMBUS AVENUE
GBA-5TH FLOOR
NEW YORK, NY 10023
United States

Bank of Finland ( email )

P.O. Box 160
Helsinki 00101
Finland

University of Sydney ( email )

P.O. Box H58
Sydney, NSW 2006
Australia

Stefano Manfredonia (Contact Author)

University of Rome Tor Vergata ( email )

Via di Tor Vergata
Rome, Lazio 00133
Italy

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