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Board Network Characteristics and Firm Performance in Korea
Author(s) -
Kim Yangmin
Publication year - 2005
Publication title -
corporate governance: an international review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.866
H-Index - 85
eISSN - 1467-8683
pISSN - 0964-8410
DOI - 10.1111/j.1467-8683.2005.00471.x
Subject(s) - group cohesiveness , business , on board , accounting , social capital , sample (material) , social network (sociolinguistics) , engineering , computer science , psychology , political science , social psychology , chemistry , chromatography , law , aerospace engineering , world wide web , social media
This paper examines the effects of board of directors’ network characteristics on firm performance using a sample of 199 large, publicly traded Korean companies from 1990 through 1999. Two board network characteristics are discussed, namely: board network density and board external social capital. Board network density is defined as the extensiveness or the cohesiveness of contact among the members of board of directors, and board external social capital refers to the degree to which board members have outside contacts in the external environment. The test results suggest that a moderate level of board network density enhances firm value, while too cohesive a board network destroys it. It is also found that board members’ elite school networks were positively associated with firm performance.