BOARD SOCIAL NETWORK CENTRALITY AND FIRM PRODUCTIVITY

Abstract

I examine whether board social network centrality affects firm productivity. I find that board centrality is negatively associated with firm productivity, potentially due to compromised monitoring of central boards. This negative association between board centrality and firm productivity survives an instrumental variable approach designed to deal with endogeneity. Further, director reputation incentives, simple operations, bankruptcy risk, product market competition and the presence of local board connections attenuate this negative impact of board centrality. I conclude that the effect of board social network centrality on firm productivity is detrimental.