Travers Child - Research Summary
Universitat Pompeu Fabra
Business networks and crisis performance: professional, political, and family ties
Previous research attributing firm performance to business networks does not adequately account for the interrelatedness of board connections, political ties, and family ownership. Many widely-cited findings may therefore be subject to confounding bias. We assemble new data covering professional, political, and family networks for 1,290 large East Asian firms during the 2008 financial crisis. Professional networks buoyed firm performance; political and family networks did not. Professional networks also dampened volatility during the crisis, whereas political networks generated the highest abnormal returns. We find evidence of confounding bias when estimating the impact of each network separately rather than jointly.
Authors: Travers Child and Richard Carney
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