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SSRN
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Corporate Finance Policies and Social Networks

SSRN Electronic Journal
2017
  • 124
    Citations
  • 34,813
    Usage
  • 109
    Captures
  • 0
    Mentions
  • 22
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    124
    • Citation Indexes
      124
  • Usage
    34,813
    • Abstract Views
      31,422
    • Downloads
      3,391
  • Captures
    109
    • Readers
      103
    • Exports-Saves
      6
      • SSRN
        6
  • Social Media
    22
    • Shares, Likes & Comments
      22
      • Facebook
        22
  • Ratings
    • Download Rank
      7,054

Article Description

This paper shows that managers are influenced by their social peers when making corporate policy decisions. Using biographical information about executives and directors of U.S. public companies, we define social ties from current and past employment, education, and other activities. We find that more connections two companies share with each other, more similar their capital investments are. To address endogeneity concerns, we find that companies invest less similarly when an individual connecting them dies. The results extend to other corporate finance policies. Furthermore, central companies in the social network invest in a less idiosyncratic way, and exhibit better economic performance.

Bibliographic Details

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