The ties that bind: Social capital and perceived competition during financial crisis

Batjargal Bolor-Erdene, Sun-Moon Jung and Sohee Park

Finance Research Letters, 2023, vol. 53, issue C

Abstract: Social capital provides various benefits for organizations. However, it may serve as constraints when strong networks prevent managers from making a timely response to emerging risks. Using a sample of U.S. listed firms around the financial crisis period, we predict and find that social capital reduces a level of perceived competition by managers. Additional analyses suggest that the incomplete perception of competition leads to low investment efficiency and poor firm performance during the crisis. Collectively, our study shows that over-embedded CEOs in social relationships may fail to take proper actions against signals of market downturns, leading to poor future performance.

Keywords: Social capital; Perceived competition; Investment efficiency; Firm performance (search for similar items in EconPapers)
JEL-codes: L14 L20 M10 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612323000417
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:53:y:2023:i:c:s1544612323000417

DOI: 10.1016/j.frl.2023.103667

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().