The Influence of Corporate Relationships Networks on the Performance of Firms in the Novo Mercado of BOVESPA

Wesley Mendes-Da-Silva, Luciano Rossoni (), Diógenes Leiva Martin () and Roy Martelanc ()
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Luciano Rossoni: Universidade Positivo
Diógenes Leiva Martin: Universidade Presbiteriana Mackenzie
Roy Martelanc: FEA/USP

Brazilian Review of Finance, 2008, vol. 6, issue 3, 337-358

Abstract: The role played by the board of a firm is one of the main aspects considered in literature on corporate governance around of the world. simultaneously, the social and institutional relations have been seen as preponderant factor for the happened results of the performance of such boards of big companies. However not yet research is verified that analyze the role of the boards from the Social Network Analysis (SNA) in Brazil. In this manner, this study aims to verify the existence of associations between centrality level, density and cohesion of the boards of Brazilian companies and firmperformance. Then, we evaluate 615 individuals, that had formed the boards of the 90 listed companies in the Novo Mercado of the S˜ao Paulo Stock Exchange in 2007. The analysis was lead in two phases. In the first one we present the configuration of the networks of board members, in second place, we verify associations between structure of the network and performance. It was verified that the centrality, density and the cohesion of the firms, in terms of its board members, are related with performance, some times in terms of Return Over Assets (Roa), some times in debt. Of this form, we conclude that organizations most located in the networks of corporative relations tend to present greater yield and minor debt.

Keywords: interlocking directorates; boards; social network; neuroeconomics. (search for similar items in EconPapers)
JEL-codes: D85 L14 N26 N36 O16 (search for similar items in EconPapers)
Date: 2008
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