EconPapers    
Economics at your fingertips  
 

Managerial Networks and Shareholder Value: Evidence from Sudden Deaths

Kirsten Tangaa Nielsen and Felix von Meyerinck ()

No 1821, Working Papers on Finance from University of St. Gallen, School of Finance

Abstract: This paper investigates the causal effect of connections among top executives and directors of different firms on shareholder value using a quasi-natural experiment. Our identification strategy rests on the idea that sudden deaths trigger unexpected and exogenous dissolutions of connections, which enables us to isolate the value of managerial connections by studying stock price reactions at firms where managers connected to a suddenly deceased manager work. Our results show that firms connected to a suddenly deceased manager experience a statistically significant reduction in shareholder value between 1.6 and 2.6 million USD, which is consistent with the notion that managerial connections foster shareholder value. When exploring the cross-sectional variation, we find evidence that connections to inside directors, connections established via previously shared work engagements, and within-industry connections are most valuable.

Keywords: Social networks; Firm value; Sudden death (search for similar items in EconPapers)
JEL-codes: L14 G14 G34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-net and nep-soc
Date: 2018-10
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://ux-tauri.unisg.ch/RePEc/usg/sfwpfi/WPF-1821.pdf (application/pdf)

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:usg:sfwpfi:2018:21

Access Statistics for this paper

More papers in Working Papers on Finance from University of St. Gallen, School of Finance Contact information at EDIRC.
Bibliographic data for series maintained by Geraldine Frei ().

 
Page updated 2019-07-14
Handle: RePEc:usg:sfwpfi:2018:21