Board of directors' social capital as factor of companies' resilience to exogenous shocks

Dmitry Kirpishchikov

Journal of the New Economic Association, 2024, vol. 62, issue 1, 50-74

Abstract: The main goal of this paper is to determine the impact of boards of directors' social capital on the companies' resilience to exogenous shocks. The study explores social capital formed by various types of connections: professional, international, and political. The data of the largest non-financial companies in Russia, which shares were included in the Moscow Exchange Broad Market Index, covers the period from 2007 to 2020. It allows analyzing the global financial crisis of 2008-2009, the commodity crisis and sanctions in 2014-2015, and the crisis caused by the COVID-19 pandemic in 2020. The empirical results of least-squares estimation of fixed-effects models show the different influences on the companies' resilience of the considered connections during the crises. The results show a persistent negative impact of these crises, except the one caused by the COVID-19 pandemic. The social capital of board members has a different influence on the companies' resilience during these crises. Professional ties decreased the negative effect during the global financial crisis. Professional and political connections strengthened the negative impact on companies' resilience during 2014-2015. Thus, the nature of the crisis plays an important role.

Keywords: social capital; companies' resilience; crisis; board of directors; directors' connections; network analysis (search for similar items in EconPapers)
JEL-codes: G30 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2024:i:62:p:50-74

DOI: 10.31737/22212264_2024_1_50-74

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