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- Title
Director networks, turnover, and appointments.
- Authors
Renneboog, Luc; Zhao, Yang
- Abstract
This paper analyzes the labor market (turnover and appointments) of executive and non‐executive directors by means of social network methodology. We find that directors with strong networks are able to obtain labor market information that enables them to leave their firm more easily for better opportunities. Networks also mitigate information asymmetry problems of external director appointments. Furthermore, the strong impact of indirect connections is in line with the 'strength of the weak ties' theory. The fact that direct connections are less important signifies that the connections to people that are close and local are likely to convey redundant information, whereas connections to distant individuals are more efficient in terms of information acquisition and labor market performance improvement.
- Subjects
LABOR market; PREDICTION markets; INFORMATION asymmetry; SOCIAL networks
- Publication
European Financial Management, 2020, Vol 26, Issue 1, p44
- ISSN
1354-7798
- Publication type
Article
- DOI
10.1111/eufm.12213