Business Networks and Crisis Performance: Professional, Political, and Family Ties

Arbeitspapier

Previous research on firm performance does not adequately account for the interrelatedness of a firm's professional connections, political ties, and family business-group affiliation. Many widely-cited findings may therefore be subject to confounding bias. To address this problem, we adopt a holistic approach by assembling a new dataset covering professional, political, and family networks for 1,290 large East Asian firms. We find that professional networks buoyed performance during the 2008 financial crisis; political and family networks did not. We provide evidence that information access is a key mechanism underlying the effect of professional networks. A one standard deviation improvement to a firm's professional network position cushioned the fall in quarterly ROA by approximately 35% during the crisis.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 15-135/V

Classification and Topics

• Classification: Wirtschaft ; Information and Market Efficiency; Event Studies; Insider Trading ; Transactional Relationships; Contracts and Reputation; Networks
• Subject: networks ; political connections ; interlocking directorates ; family ownership ; corporate governance

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Carney, Richard W. ; Child, Travers Barclay
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/130483
• Last update: 10.03.2025, 11:43 AM CET