Social networks and corporate governance

European Financial Management

Volumn 14, Issue 4, 2008, Pages 633-662

  Subrahmanyam, Avanidhar ^a  

^a UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

Corporate governance; Social network

Indexed keywords

EID: 49749135204     PISSN: 13547798     EISSN: 1468036X     Source Type: Journal    
DOI: 10.1111/j.1468-036X.2007.00429.x     Document Type: Article

References (115)

1. Admati, A. and Pfleiderer, P. A theory of intraday patterns: volume and price variability Review of Financial Studies, Vol. 1, 1988, pp. 3 40.
2. Aggarwal, R. and Samwick, A. The other side of the tradeoff: the impact of risk on executive compensation Journal of Political Economy, Vol. 107, 1999, pp. 65 105.
3. Ainsworth, M. Attachments beyond infancy American Psychologist, Vol. 44, 1989, pp. 709 16.
4. Allayannis, G. and Weston, J. The use of foreign currency derivatives and firm market value Review of Financial Studies, Vol. 14, 2001, pp. 243 76.
5. Barberis, N., Shleifer, A. and Vishny, R. A model of investor sentiment Journal of Financial Economics, Vol. 49, 1998, pp. 307 43.
6. Barclay, M. and Warner, J. Stealth trading and volatility: which trades move prices? Journal of Financial Economics, Vol. 34, 1993, pp. 281 306.
7. Bar-Gill, O. and Bebchuk, L. Misreporting corporate performance Working Paper (Harvard Law School, 2003).
8. Barro, J. and Barro, R. Pay, performance, and turnover of bank CEOs Journal of Labor Economics, Vol. 8, 1990, pp. 448 81.
9. Baumeister, R. and Leary, M. The need to belong: desire for interpersonal attachments as a fundamental human motivation Psychological Bulletin, Vol. 117, 1995, pp. 497 529.
10. Bebchuk, L. and Fried, J. Executive compensation as an agency problem Journal of Economic Perspectives, Vol. 17, 2003, pp. 71 92.
11. Bebchuk, L. and Fried, J., Pay without Performance: The Unfulfilled Promise of Executive Compensation (Harvard University Press, Cambridge MA, 2004).
12. Bebchuk, L., Fried, J. and Walker, D. Managerial power and rent extraction in the design of executive compensation University of Chicago Law Review, Vol. 69, 2002, pp. 751 846.
13. Bebchuk, L. and Grinstein, Y. The growth of U.S. executive pay Working Paper (Cornell University, Oxford Review of Economic Policies, Vol. 21, 2005, pp. 283 303).
14. Becker, G. Crime and punishment: an economic approach Journal of Political Economy, Vol. 76, 1968, pp. 169 217.
15. Becker, G., The Economic Approach to Human Behavior (University of Chicago Press, Chicago IL, 1978).
16. Belliveau, M., O'Reilly, C. and Wade, J. Social capital at the top: effects of social similarity and status on CEO compensation Academy of Management Journal, Vol. 39, 1996, pp. 1568 93.
17. Bem, D. An experimental analysis of self-persuasion Journal of Experimental Social Psychology, Vol. 1, 1965, pp. 199 218.
18. Berg, J., Dickhaut, J. and McCabe, K. Trust, reciprocity, and social history Games and Economic Behavior, Vol. 10, 1995, pp. 122 42.
19. Bolton, P., Scheinkman, J. and Xiong, W. Executive compensation and short-termist behavior in speculative markets Working Paper (Princeton University, 2006).
20. Bowlby, J., Attachment and Loss, Volume 1: Attachment (Basic Books, New York, 1969).
21. Burkart, M., Gromb, D. and Panunzi, F. Large shareholders, monitoring, and the value of the firm Quarterly Journal of Economics, Vol. 112, 1997, pp. 693 728.
22. Carter, D., Rogers, D. and Simkins, B. Hedging and value in the U.S. airline industry Journal of Applied Corporate Finance, Vol. 18, 2006, pp. 21 33.
23. Chidambaran, N. and John, K. Managerial compensation, voluntary disclosure, and large shareholder monitoring Working Paper (New York University, 2001).
24. Coffee, J. Liquidity versus control: the institutional investor as corporate monitor Columbia Law Review, Vol. 91, 1991, pp. 1277 1368.
25. Coleman, J. Social capital in the creation of human capital American Journal of Sociology, Vol. 94, 1988, pp. S95 S120.
26. Core, J., Guay, W. and Larcker, D. The power of the pen and executive compensation Working Paper (Arizona State University, 2007).
27. Daniel, K., Hirshleifer, D. and Subrahmanyam, A. Investor psychology and security market under- and overreactions Journal of Finance, Vol. 53, 1998, pp. 1839 85.
28. DeGroot, M., Probability and Statistics, 2nd ed. (Addison-Wesley Publishing Company, Reading MA 1989).
29. Diamond, D. Optimal release of information by firms Journal of Finance, Vol. 40, 1985, pp. 1071 94.
30. Donne, J., Devotions upon Emergent Associations (McGill Queens University Press, Montreal, 1975).
31. Dow, J. and Raposo, C. CEO compensation, change, and corporate strategy Journal of Finance, Vol. 60, 2005, pp. 2701 27.
32. Durnev, A. and Kim, E. To steal or not to steal: firm attributes, legal environment, and valuation Journal of Finance, Vol. 60, 2005, pp. 1461 93.
33. Efendi, J., Srivastava, A. and Swanson, E. Why do corporate managers misstate financial statements? The role of in-the-money options and other incentives Working Paper (Texas A&M University, 2006).
34. Fama, E. Market efficiency, long-term returns, and behavioral finance Journal of Financial Economics, Vol. 49, 1998, pp. 283 306.
35. Fich, E. and Shivdasani, A. Are busy boards effective monitors? Journal of Finance, Vol. 61, 2006, pp. 689 724.
36. Fischer, C., Networks and Places: Social Relations in the Urban Setting (Free Press, New York, 1977).
37. Forsythe, R., Lundholm, R. and Rietz, T. Cheap talk, fraud, and adverse selection in financial markets: some experimental evidence Review of Financial Studies, Vol. 12, 1999, pp. 481 518.
38. Frieder, L. and Subrahmanyam, A. Executive compensation and investor clientele Working Paper (Purdue University, 2007).
39. Gabaix, X. and Landier, A. Why has CEO pay increased so much? Working Paper (University of Chicago, 2006).
40. Gayle, G. and Miller, R. Has moral hazard become a more important factor in managerial compensation? Working Paper (Carnegie Mellon University, 2005).
41. Gompers, P., Ishii, J. and Metrick, A. Corporate governance and equity prices Quarterly Journal of Economics, Vol. 118, 2003, pp. 107 55.
42. Green, C. The value of client access to analyst recommendations Journal of Financial and Quantitative Analysis, Vol. 41, 2006, pp. 1 24.
43. Hall, B. and Murphy, K. Stock options for undiversified executives Journal of Accounting and Economics, Vol. 33, 2002, pp. 3 42.
44. Hartzell, J. and Starks, L. Institutional investors and executive compensation Journal of Finance, Vol. 58, 2003, pp. 2351 74.
45. Heaton, J. and Lucas, D. Stock prices and fundamentals Working Paper (University of Chicago, 1999).
46. Hermalin, B. Trends in corporate governance forthcoming, 2007, Journal of Finance, Vol. 60, 2005, pp. 2351 84.
47. Hermalin, B. and Weisbach, M. The determinants of board composition Rand Journal of Economics, Vol. 19, 1988, pp. 589 606.
48. Hermalin, B. and Weisbach, M. Endogenously chosen boards of directors and their monitoring of the CEO American Economic Review, Vol. 88, 1998, pp. 96 118.
49. Hermann, M. and Franke, G. Perfomance of policy of foundation-owned firms in Germany European Financial Management, 2002, Vol. 8, pp. 261 79.
50. Hillier, D., Linn, S. and McColgan, P. Equity issuance, CEO turnover, and corporate governance European Financial Management, 2005, Vol. 11, pp. 515 38.
51. Hirshleifer, D., Lim, S. and Teoh, S. Limited attention, information disclosure, and financial reporting Journal of Accounting and Economics, Vol. 36, 2002, pp. 337 86.
52. Hirshleifer, D. and Thakor, A. Corporate control through board dismissals and takeovers Journal of Economics and Management Strategy, Vol. 7, 1998, pp. 489 520.
53. Hogan, R., Jones, W. and Cheek, J. Socioanalytic theory: an alternative to armadillo psychology in M. Clark, ed., The Self and Social Life (Mc-Graw Hill, New York, 1985 pp. 175 98.
54. Hollinger, F. and Haller, M. Kinship and social networks in modern societies: a cross-cultural comparison across seven nations European Sociological Review, 1990, Vol. 6, pp. 103 24.
55. Holmström, B. and Tirole, J. Market liquidity and performance monitoring Journal of Political Economy, Vol. 101, 1993, pp. 678 709.
56. Hong, H., Kubik, J. and Stein, J. Social interaction and stock-market participation Journal of Finance, Vol. 59, 2004, pp. 137 63.
57. Iannaccone, L. A formal model of church and sect American Journal of Sociology, Vol. 94, 1988, pp. 241 68.
58. Jacobs, J., The Death and Life of Great American Cities (Random House, New York, 1961).
59. Jenkins, H. Business world: outrageous CEO pay revisited Wall Street Journal, 2 October 2002, p. A17.
60. Jensen, M. and Meckling, W. Theory of the firm: managerial behavior, agency costs and ownership structure Journal of Financial Economics, Vol. 3, 1976, pp. 305 60.
61. Jensen, M. and Murphy, K. Performance pay and top-management incentives Journal of Political Economy, Vol. 98, 1990, pp. 225 64.
62. John, K. and John, T. Top-management compensation and capital structure Journal of Finance, Vol. 48, 1993, pp. 949 74.
63. Johnson, S., Harvey, R. and Tian, Y. Executive compensation and corporate fraud Working Paper (Texas A&M University, 2003).
64. Jones, K. and Day, J. Discrimination of two aspects of cognitive-social intelligence from academic intelligence Journal of Educational Psychology, Vol. 89, 1997, pp. 486 97.
65. Kalmijn, M. Intermarriage and Honogamy: Causes, Patterns, and Trends Annual Review of Sociology, Vol. 24, 1998, pp. 395 421.
66. Kaplan, S. Top executive rewards and firm performance: a comparison of Japan and the United States Journal of Political Economy, Vol. 102, 1994, pp. 510 46.
67. Kumar, A. Who gambles in the stock market? Working Paper (University of Texas at Austin, 2005).
68. Kyle, A. Continuous auctions and insider trading Econometrica, Vol. 53, 1985, pp. 1315 35.
69. Lacker, J. and Weinberg, J. Optimal contracts under costly state falsification Journal of Political Economy, Vol. 97, 1989, pp. 1345 63.
70. Langer, E. and Roth, J. Heads I win tails it's chance: the illusion of control as a function of the sequence of outcomes in a purely chance task Journal of Personality and Social Psychology, Vol. 32, 1975, pp. 951 55.
71. Laumann, E., Bonds of Pluralism: the Form and Substance of Urban Social Networks (Wiley, New York, 1973).
72. Lavelle, L. How to halt the options express Business Week, 9 September 2002, p. 26.
73. Lie, E. On the timing of CEO stock option awards Management Science, Vol. 51, 2005, pp. 802 12.
74. Lo, A., Repin, D. and Steenbarger, B. Fear and greed in financial markets: a clinical study of day traders Working Paper (Massachusetts Institute of Technology, Vol. 60, 2005, pp. 2661 2700).
75. Malmendier, U. and Tate, G. CEO overconfidence and corporate investment Working Paper (Stanford University, 2003).
76. Marsden, P. Core discussion networks of Americans American Sociological Review, Vol. 522, 1987, pp. 122 31.
77. Maslow, A., Towards a Psychology of Well-Being (Van Nostrand, New York, 1968).
78. McPherson, M., Smith-Lovin, L. and Cook, J. Birds of a feather: homophily in social networks Annual Review of Sociology, Vol. 27, 2001, pp. 415 44.
79. Mishel, L., Bernstein, J. and Allegretto, S. The state of working America 2004/2005 Working Paper (Cornell University, 2005).
80. Morton, S. Strategic auditing for fraud Accounting Review, Vol. 68, 1993, pp. 825 39.
81. Murphy, K. Stock-based pay in new economy firms Journal of Accounting and Economics, Vol. 34, 2003, pp. 129 47.
82. Narayanan, M. Managerial incentives for short-term results Journal of Finance, Vol. 40, 1985, pp. 1469 84.
83. Narayanan, M. Forms of compensation and managerial decision horizon Journal of Financial and Quantitative Analysis, Vol. 31, 1996, pp. 467 91.
84. Newey, W. and West, K. A simple positive semi-definite, heteroskedasticity and autocorrelation consistent covariance matrix Econometrica, Vol. 55, 1987, pp. 703 08.
85. Nie, N. Sociability, interpersonal relations, and the internet American Behavioral Scientist, Vol. 25, 2001, pp. 420 35.
86. Noe, T. and Rebello, M. The design of corporate boards: composition, compensation, factions, and turnover Working Paper (Georgia State University, 1996).
87. Odean, T. Are investors reluctant to realize their losses? Journal of Finance, Vol. 53, 1998, pp. 1775 95.
88. Odean, T. Do investors trade too much? American Economic Review, Vol. 89, 1999, pp. 1279 98.
89. O'Reilly, C., Main, B. and Crystal, G. CEO compensation as tournament and social comparison: a tale of two theories Administrative Science Quarterly, Vol. 33, 1988, pp. 257 74.
90. Parrino, R., Sias, R. and Starks, L. Voting with their feet: institutional ownership changes around forced CEO turnover Journal of Financial Economics, Vol. 68, 2003, pp. 3 46.
91. Povel, P., Singh, R. and Winton, A. Booms, busts, and fraud Working Paper (University of Minnesota, 2003).
92. Prendergast, C. Provision of incentives in firms Journal of Economic Literature, Vol. 37, 1999, pp. 7 64.
93. Putnam, R. Bowling alone: America's declining social capital Journal of Democracy, Vol. 6, 1995, pp. 65 78.
94. Reif, F. Understanding and teaching important scientific thought processes Journal of Science Education and Technology, Vol. 4, 261 82.
95. Ronen, J. and Yaari, V. Incentives for voluntary disclosure Journal of Financial Markets, Vol. 5, 2002, pp. 349 90.
96. Rosen, S. Prizes and incentives in elimination tournaments American Economic Review, Vol. 76, 1986, pp. 701 15.
97. Ross, S. The determination of financial structure: the incentive-signalling approach Bell Journal of Economics, Vol. 8, 1977, pp. 23 40.
98. Rotter, J. A new scale for the measurement of interpersonal trust Journal of Personality, Vol. 35, 1987, pp. 651 65.
99. Schweizer, K., Beck-Seyffer, A. and Schneider, R. Cognitive bias of optimism and its influence on psychological well-being Psychological Reports, Vol. 84, 1999, pp. 627 36.
100. Schwert, G. Anomalies and market efficiency in Constantinides, G., Harris, M. and Stulz, R. eds, Handbook of Economics and Finance (North Holland, 2003).
101. Shibano, T. Assessing audit risk from errors and irregularities Journal of Accounting Research, Vol. 28, 1990, pp. 110 40.
102. Stulz, R. and Williamson, R. Culture, openness, and finance Journal of Financial Economics, Vol. 70, 2003, pp. 313 49.
103. Subrahmanyam, A. A cognitive theory of corporate disclosures Financial Management, Vol. 34, 2005, pp. 5 33.
104. Subrahmanyam, A. Corporate governance and financial markets Working Paper (University of California at Los Angeles, 2007).
105. Subrahmanyam, A. and Titman, S. The going-public decision and the development of financial markets Journal of Finance, Vol. 54, 1999, pp. 1045 82.
106. Subrahmanyam, A. and Titman, S. Feedback from stock prices to cash flows Journal of Finance, Vol. 56, 2001, pp. 2389 2413.
107. Thaler, R. The end of behavioral finance Financial Analysts Journal, Vol. 55, November/December 1999, pp. 12 17.
108. Townsend, R. Optimal contracts and competitive markets with costly state verification Journal of Economic Theory, Vol. 21, 1979, pp. 265 93.
109. Uslaner, E. Social capital, television, and the 'mean world': trust, optimism, and civic participation Political Psychology, Vol. 19, 1998, pp. 441 67.
110. Verrecchia, R. Information acquisition in a noisy rational expectations economy Econometrica, Vol. 50, 1982, pp. 1415 30.
111. Wagman, M., Human Intellect and Cognitive Science: toward a General Unified Theory of Intelligence (Praeger Publishers/Greenwood, Westport CT, 1996).
112. Winton, A. Costly state verification and multiple investors: the role of seniority Review of Financial Studies, Vol. 8, 1995, pp. 91 123.
113. Wright, E., Class Counts: Comparative Studies in Class Analysis (Cambridge University Press, New York, 1997).
114. Yuki, M. Intergroup comparison versus intergroup relationship: a cross-cultural examination of social identity theory in North American and East Asian cultural contexts Social Psychology Quarterly, Vol. 66, 2003, pp. 166 83.
115. Zerubavel, E. Private time and public time: the temporal structure of social accessibility and professional commitments Social Forces, Vol. 58, 1979, pp. 38 58.