Social capital and management commitment

Nan Liu, Brian M. Lam, Kevin Ow Yong and Desmond Yuen

Accounting Forum, 2024, vol. 48, issue 4, 698-722

Abstract: This study examines the role of social capital in fostering beneficial managerial behaviour that serves the interests of shareholders. Specifically, this research focuses on the effects of social capital on managerial ownership and dividend payout policy. We document evidence demonstrating that firms with headquarters in high social capital regions are associated with higher managerial ownership and greater dividend payouts to shareholders. Our findings are consistent with the notion that social capital induces cooperative norms and alleviates agency frictions between managers and shareholders. Additional analysis indicates that managerial ownership increases after a firm moves its headquarters to a county with higher social capital, while dividend payouts do not exhibit a significant change after relocation. In further tests, we find that the association between social capital and managerial ownership weakens after SOX, but that the association between social capital and dividend payouts does not. Finally, we show that both civic norms and associational networks influence the level of managerial ownership and dividend payouts. Overall, our study adds to the literature by deepening the understanding of the impact of social capital in shaping good managerial behaviour at the individual and corporate levels.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/01559982.2022.2151074 (text/html)
Access to full text is restricted to subscribers.

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:taf:accfor:v:48:y:2024:i:4:p:698-722

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/racc20

DOI: 10.1080/01559982.2022.2151074

Access Statistics for this article

Accounting Forum is currently edited by Carol Tilt

More articles in Accounting Forum from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().