Heterogeneity of CEO Social Networks and Firm Value
This paper examines through various channels the effects of heterogeneity in CEO social networks on firm value. We construct four measures of heterogeneity based on demographic attributes, intellectual backgrounds, professional experience, and international exposures of individuals in the social network. We find that heterogeneity in CEO social networks increases Tobin's Q. We also find that greater heterogeneity in CEO social networks leads to more innovation, more foreign sales growth, higher investment sensitivity to Tobin's Q, and better M&A performance. Overall, our results indicate that the heterogeneity of CEO social networks is an aspect of CEO social capital and soft skills that deserves the attention of shareholders.