WHOM YOU CONNECT WITH MATTERS: DIRECTOR NETWORKS AND FIRM LOCATION
Lindsay Baran and
Journal of Financial Research, 2018, vol. 41, issue 1, 113-147
We examine whether board members serve as a channel for remotely located firms to access the benefits from businessâ€ dense areas due to economies of agglomeration. We find that geographically remote firms benefit from connections to firms in top metropolitan statistical areas (MSAs) for business density. After controlling for director compensation, we find connections to top MSA firms mitigate the negative effect of increased distance from businessâ€ dense areas. We address concerns of endogeneity by exploring a sample of firms whose directors gain board seats at top MSA firms and find a similar positive impact of connections to top MSA firms.
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jfnres:v:41:y:2018:i:1:p:113-147
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