Managerial Social Capital and Firm Risk

Omar Al-Bataineh (), Abdullah Iqbal () and Timothy King ()
Additional contact information
Omar Al-Bataineh: The Hashemite University
Abdullah Iqbal: University of Kent
Timothy King: University of Vaasa

Chapter 4 in Trends, Issues, and Challenges in Banking and Finance, 2025, pp 59-100 from Palgrave Macmillan

Abstract: Abstract There has been recent interest in the role of social capital in the business environment, yet relatively little is known as to how social capital influences firm risk. We examine the relationship between managerial social capital (MSC), based on a structural definition of social capital (SC), and firm risk in the United Kingdom—a high social capital country. Using data on listed firms from 2006 to 2017, we find that MSC is associated with lower firm risk (idiosyncratic and total). Furthermore, employing corporate social responsibility (CSR), an alternative SC measure more aligned with a cognitive SC perspective, we show it is associated with higher idiosyncratic and total firm risks, consistent with a shareholder expense view. Although our main results are robust to endogeneity concerns, we also conduct numerous robustness tests, including industry-adjusted MSC measure, controlling for a firm’s risk management committee, controlling for board of directors’ national diversity mix, and using alternative risk estimations.

Keywords: Social capital; managerial social capital (MSC); network theory; firm risk; corporate social responsibility (CSR) (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:pal:pmschp:978-3-031-96066-6_4

Ordering information: This item can be ordered from
http://www.palgrave.com/9783031960666

DOI: 10.1007/978-3-031-96066-6_4

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().