From Fiction To Fact: The Impact Of CEO Social Networks
Source: University of Manchester
This paper investigates the relationship between a CEO's social network, firm identity, and firm performance. There are two competing theories that predict contradictory outcomes. Following social network theory, one would expect a positive relation between social networks and firm performance, while agency theory in general and Bebchuk's managerial power approach in particular predicts a negative relationship between social networks and firm performance. Even so, growth companies are actively seeking CEOs with a large social network, which is in line with the social network theory.