Collusive behaviour, risk and performance of tourism firms

Vu Quang Trinh, Neelu Seetaram, Kiet Tuan Duong and Xuan Vinh Vo

Tourism Economics, 2023, vol. 29, issue 8, 2103-2128

Abstract: This paper aims to enrich social network and managerial powers theories by examining the effects of board-CEO friendship ties in tourism firms. Specifically, we focus on the association between the board-CEO social network ties (e.g. serving external boards together or sharing memberships at social organisations) and performance and risk-taking behaviour among tourism firms. The findings show that friendship ties between CEO and board members result in higher risk-taking, lower profitability and market values. In addition, professional ties (i.e. current and past employment) significantly impact tourism firms’ outcomes, whereas non-professional ties (i.e. education and other social organisations) do not. The findings prevail after controlling for the Covid-19 pandemic. However, friendship ties lead to better information sharing, resulting in more effective decision-making by board members.

Keywords: Board-CEO ties; Collusive behaviour; Firm’s risks; Firms’ performance; Market value; Governance (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:29:y:2023:i:8:p:2103-2128

DOI: 10.1177/13548166221125988

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