The Influence of Social Capital of Board of Directors on a Company\'s Financial Performance

The influence of internal (common directors’ experience) and external (centrality measures and directors’ ties to government) social capital on financial performance of Russian companies is investigated in this study. Empirical analyses are based on a sample of directors from 88 large and publicly-traded companies that operate in Russia and it includes observations over the period 2012-2015, that allows to use fixed effects model for panel data. The data is provided by International Laboratory of Intangible-driven Economy (IDLAB) and some of it is collected using Ruslana and Amadeus Databases. Software package UCINET and network analysis and regression analysis packages for R are used. Results show positive influence of external social capital of Board of Directors, network analysis indices in general (Degree Centrality, Harmonic Closeness Centrality and Eigenvector Centrality), on Russian companies’ performance, whereas internal social capital and directors ties to government are not significant in Russian companies.