Outside Directors' Social Capital and Firm Performance: A Complex Network Approach

2012 ◽  
Vol 40 (8) ◽  
pp. 1319-1331 ◽  
Author(s):  
Ji-Hwan Lee ◽  
Chul Choi ◽  
Jae Min Kim
Keyword(s):  
Social Capital ◽  
Firm Performance ◽  
Complex Network ◽  
Negative Impact ◽  
Closeness Centrality ◽  
Outside Directors ◽  
Empirical Examination ◽  
Firm Financial Performance ◽  
The Social ◽  
The Relationship

In this paper we investigated whether or not the social capital of outside directors has an impact on firm financial performance and value, using a sample of 480 outside directors from 125 large Korean public trading companies. In order to measure social capital of outside directors, we mapped out their social networks on the basis of their personal affiliation in terms of educational and career background, and applied 2 commonly used complex network analysis measures; betweenness centrality and closeness centrality. A review of the existing literature led us to propose 2 competing hypotheses: first, that there would be a positive relationship between social capital of outside directors on boards and firm performance and second that the relationship would exist, but in a negative direction. The results of our empirical examination revealed a negative impact of outside directors' social capital on firm performance and value.

scholarly journals A Meta-Analysis on the Impact of Social Capital on Firm Performance in China’s Transition Economy

2020 ◽  
Vol 12 (7) ◽  
pp. 2642 ◽  
Author(s):  
Tu LYU ◽  
Xiangfeng JI
Keyword(s):  
Social Capital ◽  
Firm Performance ◽  
Transition Economy ◽  
Meta Analysis ◽  
High Tech ◽  
The Social ◽  
Specific Performance ◽  
Market Areas ◽  
The Impact ◽  
The Relationship

There is almost no research consensus on the influence of social capital on firm performance in China, which motivates our study in this paper. Our research aim here is to identify the effect of contextual and methodological moderators on the relationship between social capital and firm performance in China’s transition economy. Meta-analysis is employed to explore the impact of social capital on firm performance and to identify moderators affecting the relationship based on 106 independent studies between 2008 and 2018. The results demonstrate that the social capital–performance link is positive and significant in China. Particularly, social capital has a stronger positive relationship with performance in high-tech industries or in low-level marketization. Meanwhile, the social capital–performance link depends on the specific performance measures and dimensions. The paper clearly indicates the value of cultivating social capital and reveals that distinct types of social capital are needed at different points in different industries and market areas.

scholarly journals Governance Effectiveness: The Interaction of Ethno-Racial Diversity and Social Capital

2021 ◽  
pp. 089976402097769
Author(s):  
Christopher Fredette ◽  
Ruth Sessler Bernstein
Keyword(s):  
Social Capital ◽  
Survey Design ◽  
Secondary Analysis ◽  
Racial Diversity ◽  
Complex Activity ◽  
Board Diversity ◽  
The Social ◽  
Governance Effectiveness ◽  
Group Compositions ◽  
The Relationship

This research examines the relationship among Board Diversity, Social Capital, and Governance Effectiveness by asking, “does board ethno-racial diversity moderate the relationship between Social Capital and Governance Effectiveness, and if so, how?” Exploring the direct and interacting effects of demographic diversity and Social Capital, and their relation to governing-group effectiveness using a two-sample field survey design, we illustrate whether heterogeneous or homogeneous group compositions amplify or attenuate Governance Effectiveness, and to what degree. Primary analyses find no support for Board Diversity moderating the Social Capital-Governance Effectiveness relationship, with secondary analysis revealing a more complex interaction for Governance Effectiveness, albeit inconsistently, across samples. Our investigation points to the value of social resources in understanding governance as an inherently socially complex activity or capability, predicated on truce or mutual agreement and shaped by the composition and connections of boards.

scholarly journals Bridging and Bounding Social Capital: Social Interaction Analysis of Islets Islanders in Wakatobi Marine National Park

2020 ◽  
Vol 8 (1) ◽  
pp. 30-46
Author(s):  
Taane La Ola ◽  
Nur Isiyana Wianti ◽  
Muslim Tadjuddah
Keyword(s):  
Social Capital ◽  
National Park ◽  
Interaction Analysis ◽  
Primary Data ◽  
Bonding Social Capital ◽  
Bridging Social Capital ◽  
The Social ◽  
Relationship Of ◽  
The Relationship ◽  
Depth Interviews

The purpose of this paper is to provide an overview of the differences in the strength of social capital that is bonding and bridging two community groups, namely land-dwellers and Sama Bajo boat-dwellers in three islands in Wakatobi Marine National Park. This study used a post-positivistic research paradigm, and the primary data were collected by using a questionnaire to 240 respondents who represented the group of land-dwellers and Sama Bajo boat-dwellers on the islands of Wangi-wangi, Kaledupa, and Tomia. This research was also supported by qualitative data through in-depth interviews from several informants and desk studies. The results showed that bridging social capital relations tend to be weak in the two forms of interactions between the Sama Bajo and the land-dwellers on Wangi-wangi Island and Kaledupa Island, while bridging social capital tend to be secured in Tomia Island. We found that the social context through the historical links in the past and identity played a role in the relationship of bridging social capital and bonding social capital in the three communities as an analytical unit of this research.  

scholarly journals Social Capital Household Welfare and Poverty: Evidence from Pakistan

2016 ◽  
Vol 55 (4I-II) ◽  
pp. 467-482
Author(s):  
Nuzhat Ahmad ◽  
Mahpara Sadaqa
Keyword(s):  
Social Capital ◽  
Positive Impact ◽  
Policy Implications ◽  
Household Welfare ◽  
Heterogeneity Index ◽  
Variable Approach ◽  
The Social ◽  
Different Dimensions ◽  
Welfare And Poverty ◽  
The Relationship

The research addresses the missing link between social capital and analyses of household welfare and poverty. First the relationship between social capital and household welfare is analysed using a social capital index and a heterogeneity index. The social capital index is calculated using different dimensions: density of membership, attendance at meetings, cash and kind contributions and decision making in local organisations/associations. Heterogeneity index is based on differences in incomes, ethnicity, education and political affiliations in the composition of organisations. Endogeneity of social capital with household expenditure is tested through an Instrumental Variable approach. The relationship between social capital and probability of being poor is analysed through a logit model. The analysis uses data collected form 1050 households in and around the cities of Karachi, Lahore and Quetta. The main results indicate that social capital (however measured) has a positive impact on the welfare of the household. The study concludes that social capital and human capital have the same returns. A powerful result of the research is that households with social capital at their disposal are likely to be less poor and that poverty is less when households share risks though building associations and through collective action. The research has some policy implications which can be useful in building up social capital in the country.

scholarly journals tugas review artikel

2019 ◽  
Author(s):  
Arlika Anindya Putri
Keyword(s):  
Social Capital ◽  
Social Networks ◽  
Social Media ◽  
Social Network ◽  
Firm Performance ◽  
Positive Impact ◽  
Social Capital Theory ◽  
Capital Theory ◽  
Mediating Role ◽  
The Social

Purpose – The purpose of this study is to develop a structural equation model to explain the complexrelationship between social network and firm performance by introducing the mediating role of trust, sellingcapability and pricing capability.Design/methodology/approach – The research model with hypothesis development was derived basedon the literature. To provide empirical evidence, this study carried out a survey in which the data wereequated with a list of questionnaires with a random survey of 380 small and medium enterprises (SMEs) inthe Indonesian context.Findings – This study indicates that the use of social media in management process will not affect theincreasing firm performance, unless the firms build trust upon social networks. The social network with trustallows the firms to gain a pricing capability and a selling capability, which brings a positive impact on firmperformance. The results also show that the selling and the pricing capabilities become essential following theutilizing the social media, which concerns on trust building.Research limitations/implications – This study focused on the small-to-medium context, which hasconventionally provided an exemplary site for the development of social capital theory but raises issues ofgeneralizability across different contexts.Practical implications – To the managers, it is advisable to encourage their employees to consciouslyexploit the selling capability by enhancing the business networks via social media to achieve the firmperformance.Originality/value – This paper contributes to the social capital theory by explaining the mediating role oftrust in the complex relationship between social network and firm performance. This study provides evidencethat trust plays a pivotal role in social networks, which enable the observed firms to achieve the performance.

Intellectual capital in Ugandan service firms as mediator of board governance and firm performance

2014 ◽  
Vol 5 (3) ◽  
pp. 300-340 ◽  
Author(s):  
Stephen Korutaro Nkundabanyanga ◽  
Joseph M. Ntayi ◽  
Augustine Ahiauzu ◽  
Samuel K. Sejjaaka
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Predictor Variable ◽  
Mediating Effect ◽  
Board Governance ◽  
Content Type ◽  
Firm Financial Performance ◽  
Starting Point ◽  
The Relationship

Purpose – The purpose of this paper is to examine the mediating effect of intellectual capital on the relationship between board governance and perceived firm financial performance. Design/methodology/approach – This study was cross-sectional. Analyses were by SPSS and Analysis of Moment Structure on a sample of 128 firms. Findings – The mediated model provides support for the hypothesis that intellectual capital mediates the relationship between board governance and perceived firm performance. while the direct relationship between board governance and firm financial performance without the mediation effect of intellectual capital was found to be significant, this relationship becomes insignificant when mediation of intellectual capital is allowed. Thus, the entire effect does not only go through the main hypothesised predictor variable (board governance) but majorly also, through intellectual capital. Accordingly, the connection between board governance and firm financial performance is very much weakened by the presence of intellectual capital in the model – confirming that the presence of intellectual capital significantly acts as a conduit in the association between board governance and firm financial performance. Overall, 36 per cent of the variance in perceived firm performance is explained. the error variance being 64 per cent of perceived firm performance itself. Research limitations/implications – The authors surveyed directors or managers of firms and although the influence of common methods variance was minimal, the non-existence of common methods bias could not be guaranteed. Although the constructs have been defined as precisely as possible by drawing upon relevant literature and theory, the measurements used may not perfectly represent all the dimensions. For example board governance concept (used here as a behavioural concept) is very much in its infancy just as intellectual capital is. Similarly the authors have employed perceived firm financial performance as proxy for firm financial performance. The implication is that the constructs used/developed can realistically only be proxies for an underlying latent phenomenon that itself is not fully measureable. Practical implications – In considering the behavioural constructs of the board, a new integrative framework for board effectiveness is much needed as a starting point, followed by examining intellectual capital in firms whose mediating effect should formally be accounted for in the board governance – financial performance equation. Originality/value – Results add to the conceptual improvement in board governance studies and lend considerable support for the behavioural perspective in the study of boards and their firm performance improvement potential. Using qualitative factors for intellectual capital to predict the perceived firm financial performance, this study offers a unique dimension in understanding the causes of poor financial performance. It is always a sign of a maturing discipline (like corporate governance) to examine the role of a third variable in the relationship so as to make meaningful conclusions.

Satisfaction with democracy and social capital in Greece

2018 ◽  
Vol 45 (4) ◽  
pp. 614-628 ◽  
Author(s):  
Irene Daskalopoulou
Keyword(s):  
Social Capital ◽  
Multivariate Regression Analysis ◽  
Political Organization ◽  
Content Type ◽  
Satisfaction With Democracy ◽  
The Social ◽  
Different Types ◽  
European Values ◽  
The Relationship ◽  
The Continuum

Purpose The purpose of this paper is to investigate how different types of social capital contribute to the satisfaction with democracy (SWD) in Greece. Understanding the relationship between different variants of social capital and SWD allows one to situate the Greek democracy in the continuum of democracy types, from primary to modern. Design/methodology/approach The study uses microdata extracted from the European Values Surveys of 2002-2010 and multivariate regression analysis. Findings The results are compatible with a conception of the Greek political organization as a civil virtue democracy. A change in the nature of the relationship is observed after the recent economic crisis in the country. Research limitations/implications The study contributes to the empirical knowledge regarding the relationship between different variants of social capital and SWD. Originality/value Using a typology approach, the micro-relationship between democracy and social capital is analyzed as embedded in a continuum of different democracy types. In addition, this is the first study that uses microdata to analyze the effect of social capital upon SWD in Greece. The results of the study provide valuable understanding of the social and institutional arrangements that might sustain Greece’s efforts to meet its overall developmental challenges.

scholarly journals Government institutional support, entrepreneurial orientation, strategic renewal, and firm performance in transitional China

2019 ◽  
Vol 25 (3) ◽  
pp. 433-456 ◽  
Author(s):  
Chengli Shu ◽  
Dirk De Clercq ◽  
Yunyue Zhou ◽  
Cuijuan Liu
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Entrepreneurial Orientation ◽  
Transition Economy ◽  
Institutional Support ◽  
Equation Modeling ◽  
Content Type ◽  
Strategic Renewal ◽  
Firm Financial Performance ◽  
The Relationship

PurposeThe purpose of this paper is to examine how entrepreneurial orientation (EO) and strategic renewal (as a critical dimension of corporate entrepreneurship) might transmit government institutional support and thereby enhance firm performance in a transition economy.Design/methodology/approachMulti-respondent data were collected from 230 Chinese-based firms. The hypotheses were tested with structural equation modeling, in combination with a bias-corrected bootstrap method, to assess the significance of the theorized direct and indirect relationships.FindingsGovernment institutional support enhances EO and strategic renewal individually, yet EO also fully mediates the relationship between government institutional support and strategic renewal. Moreover, strategic renewal fully mediates the relationship between EO and firm financial performance, and it partially mediates the relationship between EO and firm reputation.Originality/valueThis study contributes to entrepreneurship literature by testing an organization-level model of entrepreneurial phenomena in established firms that identifies EO and strategic renewal as two distinct mechanisms through which government institutional support in a transition economy can enhance organizational effectiveness, which entails the firm’s financial performance and reputation. In doing so, this study provides an extended understanding of how EO and strategic renewal might influence a firm’s financial and nonfinancial outcomes in different ways.

scholarly journals Getting CFO on board – its impact on firm performance and earnings quality

2020 ◽  
Vol 33 (2) ◽  
pp. 435-454
Author(s):  
Lien Duong ◽  
John Evans ◽  
Thu Phuong Truong
Keyword(s):  
Firm Performance ◽  
Negative Impact ◽  
Earnings Quality ◽  
Least Square ◽  
Chief Financial Officers ◽  
Outside Directors ◽  
Content Type ◽  
Ordinary Least Square ◽  
Board Membership ◽  
The Impact

Purpose This paper aims to investigate the impact of Australian Chief Financial Officers (CFOs) as board insiders on firm performance and earnings quality with reference to agency theory and theory of friendly board. Design/methodology/approach The ordinary least square, two-stage least-squares and propensity score matching regressions are performed with various proxies for firm performance and accruals quality. Findings Firms with CFOs as board insiders experience significantly lower firm performance and earnings quality. In firms with powerful CEOs, the negative impact of CFO board membership on earnings quality is further magnified. Additionally, the negative impact of CFO board membership on firm values and earnings quality is only present in firms with bigger boards or firms with less outside directors. The findings are consistent with the agency perspective and in sharp contrast to the US market. Originality/value This is the first Australian study to examine the impact of CFO board membership on firm performance and earnings quality. The findings suggest that the monitoring of executives is best done by a small or independent board and that the insider board membership should be optimised.

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