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Whom You Connect With Matters: Director Networks And Firm Location

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  • Lindsay Baran
  • Rachel Wilson

Abstract

We examine whether board members serve as a channel for remotely located firms to access the benefits from business†dense areas due to economies of agglomeration. We find that geographically remote firms benefit from connections to firms in top metropolitan statistical areas (MSAs) for business density. After controlling for director compensation, we find connections to top MSA firms mitigate the negative effect of increased distance from business†dense areas. We address concerns of endogeneity by exploring a sample of firms whose directors gain board seats at top MSA firms and find a similar positive impact of connections to top MSA firms.

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  • Lindsay Baran & Rachel Wilson, 2018. "Whom You Connect With Matters: Director Networks And Firm Location," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 41(1), pages 113-147, March.
    • Handle: RePEc:bla:jfnres:v:41:y:2018:i:1:p:113-147
    DOI: 10.1111/jfir.12141
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    Cited by:

    1. Yu-En Lin & Jia-Qi Yu & Hsiang-Hsuan Chih & Kung-Cheng Ho, 2022. "Near is more: learning efficiency in research and development innovation among interlocking firms," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-30, December.

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