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Article: What's in a Name? The Valuation Effect of Directors' Sharing of Surnames

TitleWhat's in a Name? The Valuation Effect of Directors' Sharing of Surnames
Authors
KeywordsSurname
Board diversity
Social tie
Firm value
Board voting
Issue Date2021
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jbf
Citation
Journal of Banking & Finance, 2021, v. 122, p. article no. 105991 How to Cite?
AbstractUsing surname sharing as a novel measure of social ties, we examine the effect of directors’ surname sharing on firm value. We find that boards with greater surname homogeneity are associated with lower firm value. This finding is not driven by familial ties. The negative effect of surname sharing on firm value is more pronounced when directors share rare surnames and when firms operate in regions with stronger clan systems, but is attenuated by stronger corporate governance mechanisms. The market reacts positively to plausibly exogenous director resignations that reduce director surname sharing, and negatively to board appointments that increase director surname sharing. Director surname sharing lowers firm value by reducing director dissension, granting excess executive compensation, and increasing related-party transactions. Overall, our results suggest that directors’ surname sharing, an easy-to-trace but previously neglected social tie, can have significant economic consequences. © 2020 Elsevier B.V.
Persistent Identifierhttp://hdl.handle.net/10722/290831
ISSN
2020 Impact Factor: 3.07
2015 SCImago Journal Rankings: 1.264
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorTan, Y-
dc.contributor.authorXiao, J-
dc.contributor.authorZeng, CC-
dc.contributor.authorZou, H-
dc.date.accessioned2020-11-02T05:47:44Z-
dc.date.available2020-11-02T05:47:44Z-
dc.date.issued2021-
dc.identifier.citationJournal of Banking & Finance, 2021, v. 122, p. article no. 105991-
dc.identifier.issn0378-4266-
dc.identifier.urihttp://hdl.handle.net/10722/290831-
dc.description.abstractUsing surname sharing as a novel measure of social ties, we examine the effect of directors’ surname sharing on firm value. We find that boards with greater surname homogeneity are associated with lower firm value. This finding is not driven by familial ties. The negative effect of surname sharing on firm value is more pronounced when directors share rare surnames and when firms operate in regions with stronger clan systems, but is attenuated by stronger corporate governance mechanisms. The market reacts positively to plausibly exogenous director resignations that reduce director surname sharing, and negatively to board appointments that increase director surname sharing. Director surname sharing lowers firm value by reducing director dissension, granting excess executive compensation, and increasing related-party transactions. Overall, our results suggest that directors’ surname sharing, an easy-to-trace but previously neglected social tie, can have significant economic consequences. © 2020 Elsevier B.V.-
dc.languageeng-
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jbf-
dc.relation.ispartofJournal of Banking & Finance-
dc.subjectSurname-
dc.subjectBoard diversity-
dc.subjectSocial tie-
dc.subjectFirm value-
dc.subjectBoard voting-
dc.titleWhat's in a Name? The Valuation Effect of Directors' Sharing of Surnames-
dc.typeArticle-
dc.identifier.emailZou, H: hongzou@hku.hk-
dc.identifier.authorityZou, H=rp01800-
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1016/j.jbankfin.2020.105991-
dc.identifier.scopuseid_2-s2.0-85095684937-
dc.identifier.hkuros318353-
dc.identifier.volume122-
dc.identifier.spagearticle no. 105991-
dc.identifier.epagearticle no. 105991-
dc.identifier.isiWOS:000596849900008-
dc.publisher.placeNetherlands-
dc.identifier.issnl0378-4266-

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