Board Social Capital Research Articles

Artificial intelligence and green product innovation: Moderating effect of organizational capital

Green product innovation (GPDI) is crucial for addressing ecological issues and essential for enterprises' green operations and long-term growth. Digitization offers new possibilities for enhancing corporate green practices. Nevertheless, previous studies have predominantly addressed the association between overall digitalization and corporate green innovation, and research on the outcome of specific digital technology categories on green innovation is lacking. Within this framework, this study broadens the investigation into the connection between distinct categories of digital technologies and corporate green innovation. The period 2013–2022 was selected as the sample observation period, with companies listed on China's A-share market as the study objects. The fixed-effects model was applied to investigate the impact of artificial intelligence (AI) on firms' GPDI while exploring the interaction effect of firms' organizational capital. The findings indicate that AI is beneficial to GPDI in businesses. This effect is enhanced by employee and board human capital but diminished by board social capital. These results remained valid after two-stage least squares regression. This study broadens the utilization of the resource-based view and dynamic capacity theory in business implementation. Furthermore, it extends the resulting study of AI and provides a digital enhancement pathway for corporate GPDI. This study has significant theoretical and practical implications.

Synergizing board dynamics, sustainability, and strategy for international success

AbstractThis study investigates the dynamic nexus between board characteristics, sustainability initiatives, and corporate strategies, offering critical insights into their collective impact on international performance. Utilizing a structural equation model and data from Colombian SMEs, our research underscores the influential role of diverse board attributes, encompassing social and human capital, in shaping managerial practices and decision‐making processes, ultimately influencing the outcomes of internationalization endeavors. The study emphasizes the significance of internally and externally well‐connected boards in facilitating effective internationalization efforts, affirming previous research highlighting the positive influence of board social capital on international performance. Furthermore, it reveals that board human capital, particularly directors with expertise in international business, substantially contributes to informed global strategy, empowering managers to craft robust internationalization approaches. The study's pivotal finding lies in the interactive impact of organizational Sustainability, advocating for a corporate strategy centered on Sustainability, which fosters a competitive advantage and advances international performance.

The impact of CEO age on a firm’s choice of global reporting initiative: moderating role of board social capital

PurposeThis study aims to explore the impact of the chief executive officer’s (CEO) age on adopting global reporting initiative (GRI) framework for corporate social responsibility (CSR) reporting. It also underlines how board social capital moderates the relationship between CEO age and the adoption of the GRI framework.Design/methodology/approachChinese A-listed companies during 2010–2018 were used. The authors applied a logistic regression model due to the binary nature of the dependent variable. For robustness, two-step generalized method of moments (GMM) and lagged independent variables are used.FindingsThe study finds that CEO age negatively impacts the firm’s choice of GRI reporting framework. The social capital of the board positively moderates this relationship. This finding is based on the notion that as a CEO grows older or headed toward retirement age, his/her interest in CSR diminishes due to a shorter career horizon. Boards with external links provide better advice on CSR issues and mitigate the negative impact of CEO age.Practical implicationsThe study results are important for understanding the GRI framework’s development and implementation, particularly in China.Originality/valueTo the best of the authors’ knowledge, this is the first study that deeply examines how CEO age affects GRI adoption in the Chinese context and how the board’s social capital moderates this relationship.

Board social capital in an emerging market: Do directors’ connections affect corporate risk-taking?

Using a sample of 112 Russian firms, we examine the influence of the board of directors' social capital on corporate risk-taking. We explore three sources of social capital: professional, political, and educational connections of directors. These measures of social capital are positively related to risk-taking. Boards with directors who are busier, more politically connected, in more central positions, and graduated from any university in Moscow or St. Petersburg take more risk. In addition, the number of directorships and corporate risk-taking have a nonlinear relation. Serving on several boards at the same time is thus positively related to corporate risk-taking at low directorship levels. We also find that board social capital and directors' characteristics play a significantly positive role only at companies with relatively low levels of corporate risk-taking, such that the board's characteristics are not relevant in high-risk situations.

Measuring the Enterprise Green Innovation Strategy Decision-Making Quality: A Moderating-Mediating Model.

Green development helps to balance the conflict between economic expansion, environmental protection, and green strategy decisions by tackling the issue of excessive resource utilization during regional growth. This study aims to measure the green innovation strategic decisions quality by identifying the nexus between board capital, green innovation strategic information acquisition capability, and board group Faultline. A conceptual model has been proposed and tested to verify the proposed relationship. Data collection was analyzed using structural equation modeling in AMOS 24.0. The findings indicate that board human capital (BHC) and board social capital (BSC) have a beneficial influence on the quality of green innovation strategy decision-making. The green innovation strategic information acquisition capability plays a mediating role in the relationship between the two dimensions of board capital and the green innovation strategy decision-making quality. The mediating role of green innovation strategic information acquisition capability is moderated by board group Faultline. The core significance of this study is presented.

Immigrant founder chief executive officers, firm innovation, and performance: The role of cultural distance and top management team and board social capital

Drawing upon social cognitive and learning theories and social embeddedness perspective, we develop a conceptual framework for exploring the impact of immigrant founder chief executive officers on firm performance through firm innovation. We propose that immigrant founder chief executive officers are more likely to lead their firm with an innovative mentality due to their biculturalism, thus enhancing firm innovation and performance. We suggest that the impact of immigrant founder chief executive officers on firm innovation is moderated by cultural distance such that moderate cultural distance results in greater innovation, and ultimately, performance. We also indicate that top management team and board members’ local social capital, as well as immigrant founder chief executive officers’ foreign social capital, enhance the proposed relationships. A discussion of the relationships, limitations, and future research directions is provided.

The influence of board social capital on corporate social responsibility reporting

PurposeThe main objective of this paper is to analyze the influence of multiple directorships, as a critical component of board social capital, on CSR reporting. This study also explores the moderating effect of certain board attributes on multiple directorships.Design/methodology/approachThe authors’ sample is composed of Spanish listed firms in the Madrid Stock Exchange for the period 2011–2017. A dynamic panel data model based on the Generalized Method of Moments (GMMs) is employed.FindingsRelying on a resource dependence view, the authors’ results highlight an ambiguously positive association between multiple directorships and the level of CSR reporting. In particular, this relationship is positively moderated by both board size and gender diversity.Research limitations/implicationsThese findings contribute to academic debates concerning the value of board members intellectual capital. In particular, the authors emphasize the importance of board social capital, as well as the need to consider the context in which directors make decisions.Practical implicationsThis evidence may prove helpful to firms when configuring the board of directors, and for regulators and professionals when refining their legislations and recommendations.Originality/valueTo the best of the authors' knowledge, this is the first study that empirically analyzes the impact of an important element of board social capital, such as multiple directorships, on CSR reporting, which has become crucial in financial markets.

The Effect of Family Involvement on Innovation Outcomes: The Moderating Role of Board Social Capital

Innovation is an essential and yet puzzling part of family firms’ strategic focus. While family firms are generally characterized as conservative regarding their research and development (R&D) activities, researchers have recently argued that family firms can still achieve innovation‐based competitive advantages. Seeking to understand the link between family influence and the outcomes of innovation, we suggest that it is necessary not only to observe the depth of family involvement, but also to differentiate between technological inventions and market innovations. We further posit that the board members’ social capital constitutes an important contingency for this link. We, therefore, investigate the relationship between family involvement and two different outcomes: the number of the firm’s inventions and the market relevance of innovations. Our analysis of S&P 500 firms comprises 1.85 million patents and manual evaluations of 1774 product announcements. The results of our estimations suggest that family involvement is negatively related to the number of inventions and positively related to the market relevance of innovations. They further show that internal and external board social capital moderate the relationship between family involvement and the number of inventions. This study adds to the discussion about family firm innovation by using socioemotional wealth to explain heterogeneity in innovation patterns and revealing that relational resources derived from board social capital are crucial boundary conditions for families’ influence on technological inventions. Taken together, it works toward a more holistic view of innovation in family‐influenced firms.

New Insights into Non-Listed Family SMEs in Spain: Board Social Capital, Board Effectiveness, and Sustainable Performance

This study proposes an original structural model that analyzes the relationship between sustainable firm performance, and a board of directors’ external and internal social capital. Data collected in 232 non-listed and family-run small and medium-sized enterprises in Spain suggest that the effects of boards’ internal and external social capital on sustainable firm performance were partially transmitted through board effectiveness. However, external social capital influences board effectiveness and sustainable firm performance more than internal social capital. Moreover, interlocks only reinforce the relationship between a board’s external social capital and its effectiveness. Our research offers the following main contributions: (1) A proposed structural theoretical model, (2) a focus on both internal and external social capital, unlike previous literature that emphasized only one perspective, and (3) empirical evidence that supports literature on the interlocking interaction between a boards’ internal and external social capital.

How does a board of directors influence within‐ and cross‐sector nonprofit collaboration?

Board members play a significant, yet largely unexamined, role in nonprofit collaboration. Processes, such as finding prospective partners, creating common ground with a partner, and establishing appropriate collaborative governance implicate nonprofit board members. In contrast to the scholarship of the role of interlocking directorates as potential networks for nonprofit collaboration, this paper examines the role of board members' social and human capital on nonprofit collaboration with other nonprofits, businesses, and government agencies. Drawing on online survey data from 636 nonprofit organizations, this paper finds that board social capital—but not board human capital—is positively related to the presence and number of within‐sector and cross‐sector nonprofit collaboration. However, board human capital enhances nonprofit‐government collaboration, when board social capital is also high. The results provide a novel perspective in nonprofit collaboration and board management research.

Board social capital reduces implied cost of capital for private companies but not of state-owned companies

PurposeThe purpose of this paper is to analyze how the type of ownership and control moderates the effect of the board social capital on the implied cost of capital. To do so, the authors analyzed the effect of the board social capital by the relational resources present in its direct and heterogenous ties, considering the predictions of analysts about the implied cost of capital.Design/methodology/approachThe data panel comprised 137 companies listed on the Brazilian stock exchange between the years of 2002 and 2015, generating a total of 535 observations. The authors check the robustness of the results through instrumental variables and systems of equations, as well as compete for the effect of board social capital both by the board and ownership structures.FindingsResults show that the board relational resources, both in direct and heterogeneous ties, significantly reduce the implied cost of capital for private companies, but not for state-owned companies. Board social capital reduces the cost of capital even when the results compete with the board structure and concentration of ownership, being able to mitigate the discount in the cost of capital by the presence of dominant shareholders.Originality/valueThis study uses a more theoretically and empirically comprehensive measure of board social capital than the majority of studies that use only network position indicators. So, contrasting the effect of this measure on the implied cost of capital between private and state-owned companies, the authors also demonstrate that the board social capital can mitigate the discount by ownership concentration on the implied cost of capital.

Effect of Board Social Capital on Innovativeness in the Banking Industry in Kenya

Extant literature on impact of board capital on firm innovativeness, was prior to this research inconclusive, with some studies showing positive, negative or no effect. Anchored on agency, resource dependence and social capital theories, the researcher sought to determine impact of social capital on innovativeness in banks. Kenya has experienced innovations in the banking sector driven by mobile technologies. The researcher hypothesized that social capital positively impacts firm innovativeness. Independent variables were director interlocks, status and prestige of the directors and presence of personal or other affiliations between directors and the bank or chief executive. Two control variables were added, to mitigate their confounding effect on bank innovativeness. A causal research design was selected and purposive sampling undertaken to choose respondents to a questionnaire. Unit of analysis was boards of banks. 32 questionnaires were returned, a response rate of 74%. Data was analyzed using SPSS, after testing for assumptions made. The study found there was statistically significant relationship between director interlocks and status and prestige of the directors and innovativeness of banks. This study resolved disagreement in extant literature, concluding that board interlocks and board status and prestige were found to drive innovativeness. There was no statistically significant relationship between presence of personal or other affiliations between the directors and the bank or chief executive and bank innovativeness. This study benefits management, in providing a selection criteria for directors of entities focusing on innovativeness. Major limitation of the study is the narrow focus on banking sector impacting generalization of the study

Board Social Capital and Organizational Performance in Social Enterprises

In the social entrepreneurship literature, a consensus is emerging that the board of directors is of major importance to deal with the specific tensions social enterprises, as hybrid organizations,...

Multi-dimensional institutional reforms and board human and social capital in emerging markets

Boardroom is a firm’s central arena where strategic responses are made to the dynamics and complexities of external environments. But whether and through what mechanism the board’s makeup and struc...

How boards’ internal and external social capital interact to affect firm performance

Board social capital encompasses two types of relationships: external and internal ties. This study examines the effects of board social capital on firm performance using a sample of the 103 companies listed on The Madrid Stock Exchange (2008). In order to measure board internal social capital, we consider the directors’ co-working experience on the board. On the other hand, to measure external board social capital, we rely on the directors’ ties to other organizations through interlocking directorates. We introduce internal social capital as a necessary variable for a more complete understanding of the external social capital/firm performance relationship. Our results have important implications for corporate governance practices. When firms propose reconsidering the composition of boards, they should not be guided solely by the intention of maximizing external connections. On the contrary, they should really take into account the fundamental role of internal social capital, which (1) intensifies the positive effects of the external capital when its level is low and (2) attenuates the negative effects of an excess of the board’s external social capital.

Diversity in human and social capital: Empirical evidence from Asian tourism firms in corporate board composition

This study examines the links between the composition of the board of directors of 85 tourism firms in China, Hong Kong, Malaysia and Singapore and firm performance for the period 2001 to 2012. Distinctions are made between the composition of board's human and social capital, and it is generally found that diversity in board's social capital is positively related with firm performance, especially during periods of crisis. Nonlinearities are found in the relationship between diversification of board and firm performance, suggesting that an over-diversification of the composition of human and social capital can impede firm performance. Various recommendations are made based upon the findings.

Board social capital and excess CEO returns

ExcessCEOreturns refer toCEOfinancial returns in excess of shareholder returns. How do boards rein in excessCEOreturns? Introducing a social capital view of board monitoring, we suggest that boards face two competing normative pressures—corporate elite norms and monitoring norms. How boards conform to such normative pressures for controlling excessCEOreturns is affected by their external and internal social capital. Further, we substantiate our arguments by showing that powerfulCEOs and institutional investors may facilitate or constrain the normative pressures existing in the social network and alter the effects of board social capital on excessCEOreturns. Data from a sample ofU.S.corporations listed on theStandard andPoor's 1,500 index from 1999 to 2010 largely support our framework. Copyright © 2014 John Wiley & Sons, Ltd.

Sociology of School Boards: A Social Capital Perspective

School boards have received little attention in sociology of education. Drawing on organizational sociology, a model of school board social capital is proposed that treats brokerage (external ties) and closure (internal ties) as the key dimensions of board functioning. The model brings together insights from limited research on school boards concerning members' internal and external ties and recasts them as the building blocks of a unifying theoretical framework. It also proposes specific performance outcomes at the district level. The model is tested using the data from a representative sample of Pennsylvania districts. The analysis not only explores brokerage and closure patterns among school boards, but also examines their implications for academic outcomes. Findings suggest that eighth grade reading and mathematics performance are highest in districts, where boards exhibit high levels of both brokerage and closure, and lowest in districts, where brokerage and closure are both low.

Does board social capital influence chief executive officers' investment decisions in research and development?

The findings of the chief executive officer (CEO) characteristics–research and development (R&D) investment relationship remain incomplete if previous unexamined contingencies are not considered. Very few studies in this area have invariably focused on the constraints from the external environment and overlooked the important influence of board social capital on such relationship. This study uses insights from resource dependence theory to examine how the effects of CEO characteristics on R&D investment are contingent on board social capital. The results show that board social capital mitigates/enhances the negative/positive effect of CEO tenure/CEO educational level on R&D investment, supporting the view that board social capital, as an important conduit to link firms to critical information and essential resources in the environment, may offer better counsel to CEOs and enhance their decision‐making capabilities in moving toward R&D. One important implication is that firms wishing to encourage innovation through R&D spending should consider nominating directors with rich social capital to the board because they may assist CEOs in coping with R&D complexities and acquiring requisite resources, leading to a better planning of R&D.

Board Social Capital and Excess CEO Compensation

How do boards rein in excess CEO pay, i.e., compensation above that of industry peers? By introducing a social capital view of CEO compensation, we suggest that the board’s external and internal social capital are important yet often ignored concepts that may affect the board’s ability to keep excess CEO pay under control. Further, we bridge the board social capital research with sociopolitical factors in order to provide a more holistic theoretical rationale for excess CEO compensation. Specifically, we argue that external and internal board social capital can have distinctive impacts on excess CEO compensation. In addition, the social capital effects on excess CEO pay are moderated by: (1) CEO power, which can regulate access to the corporate elite as well as shape internal governance norms, and (2) organizational complexity, which can increase board discretion but may also lead to information problems. We find support for the majority of our arguments in a longitudinal study of 1,983 publicly-held United States corporations listed on the Standard and Poor’s 1,500 index from 1999 to 2010.