Managerial Social Capital and Financial Development: A Cross‐Country Analysis

32 Pages Posted: 14 Jan 2016

See all articles by Stephen P. Ferris

Stephen P. Ferris

University of Missouri at Columbia - Department of Finance

David Javakhadze

Florida Atlantic University

Dan W. French

Lamar University; University of Missouri at Columbia

Multiple version iconThere are 2 versions of this paper

Date Written: February 2016

Abstract

This study examines the issue of whether managerial social capital, defined as aggregate benefits of social obligations and informal contacts formed through social networks, has an impact on financial development. Utilizing a large cross‐country sample for the period 1999–2012, we provide evidence that higher levels of social capital have a positive effect on financial development. We are able to examine different types of social connections for our sample firms and find that informal and nonprofessional relationships matter the most for financial market development. These findings are robust to alternative model specifications, variable measurement, and estimation techniques.

Keywords: social capital, social networks, financial development

JEL Classification: F19, G29, Z13

Suggested Citation

Ferris, Stephen P. and Javakhadze, David and French, Dan W., Managerial Social Capital and Financial Development: A Cross‐Country Analysis (February 2016). Financial Review, Vol. 51, Issue 1, pp. 37-68, 2016, Available at SSRN: https://ssrn.com/abstract=2715229 or http://dx.doi.org/10.1111/fire.12097

Stephen P. Ferris

University of Missouri at Columbia - Department of Finance ( email )

214 Middlebush Hall
Columbia, MO 65211
United States
573-882-6272 (Phone)
573-884-6296 (Fax)

David Javakhadze (Contact Author)

Florida Atlantic University ( email )

College of Busines
777 Glades Road
Boca Raton, FL 33433
United States
561-297-2914 (Phone)

Dan W. French

Lamar University ( email )

PO Box 10745
Beaumont, TX 77710
United States
409-880-8603 (Phone)

University of Missouri at Columbia ( email )

Columbia, MO Columbia 65211
United States

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