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Productivity, managers' social connections and the Great Recession

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This paper investigates whether managers' personal connections help corporations to escape the productivity trap. Leveraging the heterogeneity in the severity of the Great Recession across different sectors, the paper reports that (i) the Great Recession had a negative effect on corporate productivity, (ii) the effect was long-lasting and persistent, supporting a productivity-hysteresis hypothesis, (iii) managers' personal connections are counter-cyclical and indeed allowed corporations to escape the productivity trap primarily via favorable credit conditions, in periods of high information asymmetries and tight credit constraints.

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  • Iftekhar Hasan & Stefano Manfredonia, 2021. "Productivity, managers' social connections and the Great Recession," CEIS Research Paper 507, Tor Vergata University, CEIS, revised 10 Mar 2021.
    • Handle: RePEc:rtv:ceisrp:507
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    More about this item

    Keywords

    Social networks; Great Recession; Productivity.;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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