Board network, investment efficiency, and the mediating role of CSR: Evidence from China

Abstract

Drawing from the social network theoretical framework, this paper examines the impact of a firm's position in the board network on its investment efficiency and the mediating role of corporate social responsibility (CSR) on that impact. The findings suggest that when a firm is at the center or at the structural hole positions in the board network, its investment efficiency improves. The center and structural hole positions enhance a firm's CSR, which further leading to better investment efficiency. Additional analysis suggests that the impact of a firm's network position on investment efficiency is more salient for non-state owned firms, and the board network can improve enterprise investment efficiency by improving the information environments and alleviating the financing constraints of such enterprises, which verifies the specific mechanism of CSR acting as an intermediary.