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Relationships Matter: Directors and Revenue Performance in the Fortune 500 Network

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Advances in Human Factors, Business Management and Leadership (AHFE 2017)

Part of the book series: Advances in Intelligent Systems and Computing ((AISC,volume 594))

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Abstract

Conventional wisdom states that relationships matter, thus interlocking directorships among corporations has spawned a vast amount of studies. Built on our previous research that discovered director interlocks are correlated with Fortune 500 ranking, this paper further explores the relationship of director interlocks and corporate revenue performance. Controlling for standard firm financial performance measures of GPM, S&P returns and number of employees, we look at various social network metrics from director interlocks, including degree, betweeness and closeness from the Fortune 500 network from 1996–2007. Here we employ a fixed effects, panel OLS model to analyze both if and how director relationships impact firm revenues. Our results indicate that director relationships are as important as traditional corporate measures and can almost double the explanatory power of Fortune 500 corporations’ revenue performance.

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Author information

Authors and Affiliations

  1. Claremont Graduate University, Claremont, CA, 91711, USA

    Mark Abdollahian & Zining Yang

  2. La Sierra University, Riverside, CA, 92505, USA

    Zining Yang & John Thomas

Authors
  1. Mark Abdollahian
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  2. Zining Yang
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  3. John Thomas
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Corresponding author

Correspondence to Zining Yang .

Editor information

Editors and Affiliations

  1. Belgafik Oy, University of Vaasa, Vaasa, Finland

    Jussi Ilari Kantola

  2. University of Szeged, Szeged, Hungary

    Tibor Barath

  3. Institute of Maritime Operations, University College of Southeast Norway, Borre, Norway

    Salman Nazir

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Abdollahian, M., Yang, Z., Thomas, J. (2018). Relationships Matter: Directors and Revenue Performance in the Fortune 500 Network. In: Kantola, J., Barath, T., Nazir, S. (eds) Advances in Human Factors, Business Management and Leadership. AHFE 2017. Advances in Intelligent Systems and Computing, vol 594. Springer, Cham. https://doi.org/10.1007/978-3-319-60372-8_11

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  • DOI: https://doi.org/10.1007/978-3-319-60372-8_11

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-60371-1

  • Online ISBN: 978-3-319-60372-8

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