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The Influence of Corporate Relationships Networks on the Performance of Firms in the Novo Mercado of BOVESPA

Author

Listed:
  • Wesley Mendes-da-Silva

    (FEA/USP)

  • Luciano Rossoni

    (Universidade Positivo)

  • Diógenes Leiva Martin

    (Universidade Presbiteriana Mackenzie)

  • Roy Martelanc

    (FEA/USP)

Abstract

The role played by the board of a firm is one of the main aspects considered in literature on corporate governance around of the world. simultaneously, the social and institutional relations have been seen as preponderant factor for the happened results of the performance of such boards of big companies. However not yet research is verified that analyze the role of the boards from the Social Network Analysis (SNA) in Brazil. In this manner, this study aims to verify the existence of associations between centrality level, density and cohesion of the boards of Brazilian companies and firmperformance. Then, we evaluate 615 individuals, that had formed the boards of the 90 listed companies in the Novo Mercado of the S˜ao Paulo Stock Exchange in 2007. The analysis was lead in two phases. In the first one we present the configuration of the networks of board members, in second place, we verify associations between structure of the network and performance. It was verified that the centrality, density and the cohesion of the firms, in terms of its board members, are related with performance, some times in terms of Return Over Assets (Roa), some times in debt. Of this form, we conclude that organizations most located in the networks of corporative relations tend to present greater yield and minor debt.

Suggested Citation

  • Wesley Mendes-da-Silva & Luciano Rossoni & Diógenes Leiva Martin & Roy Martelanc, 2008. "The Influence of Corporate Relationships Networks on the Performance of Firms in the Novo Mercado of BOVESPA," Brazilian Review of Finance, Brazilian Society of Finance, vol. 6(3), pages 337-358.
    • Handle: RePEc:brf:journl:v:6:y:2008:i:3:p:337-358
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    Citations

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    Cited by:

    1. Luciano Rossoni & Cezar Eduardo Aranha & Wesley Mendes-Da-Silva, 2018. "Does the capital of social capital matter? Relational resources of the board and the performance of Brazilian companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 22(1), pages 153-185, March.

    More about this item

    Keywords

    interlocking directorates; boards; social network; neuroeconomics.;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
    • N36 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Latin America; Caribbean

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