Given we were considering a paper about the crash and interrelations among banks this social network perspective might be interesting.
Bruce Cronin, University of Greenwich
After the Crash: The Effects of Financial Crisis on UK Director Interlocks
Humanities Bridgeford Street, Room G6
From 4pm – 6pm
No booking required, all welcome!
Abstract
This paper examines the impact of the 2008-09 financial crisis on the structure of director interlocking in the UK. Utilising a large dataset of 2300 firms with annual sales exceeding £500m, and their 14,000 directors, social network analytic techniques are used to examine changes to the composition of the interlocking core and the network positions of specific actors, in both inter-firm and inter-personal dimensions, between 2006 and 2009.
Established theory suggests the financial crisis could be expected to have four principal effects on the interlock structure. First, fissures in the structure, created by the exit of highly connected or otherwise central major players, and a general weakening of the effectiveness of the 'corporate scan'. Second, an expansion in board size, particularly with links to financial institutions, as firms attempted to co-opt resources to compensate for the disruption to funding lines and other sources of uncertainty. Third, in a contradictory manner decreased and increased executive director activism associated with both the withdrawal from specific exposed positions and specific attempts to capitalise on new opportunities created by the disruption. And fourth, increased executive director activism in political forums, aimed at securing a regulatory framework less vulnerable to such disruption in the future.
The findings are generally consistent with the theoretical expectations, revealing a dramatic disruption to the network and contraction of the main component, associated with the withdrawal of major players. Board size expands in a manner consistent with uncertainty reduction and contradictory trends in executive director activism are apparent.
The seminar will continue in the pub afterwards, as usual.
We hope to see you there,
Elisa and Martin
Bruce Cronin, University of Greenwich
After the Crash: The Effects of Financial Crisis on UK Director Interlocks
Humanities Bridgeford Street, Room G6
From 4pm – 6pm
No booking required, all welcome!
Abstract
This paper examines the impact of the 2008-09 financial crisis on the structure of director interlocking in the UK. Utilising a large dataset of 2300 firms with annual sales exceeding £500m, and their 14,000 directors, social network analytic techniques are used to examine changes to the composition of the interlocking core and the network positions of specific actors, in both inter-firm and inter-personal dimensions, between 2006 and 2009.
Established theory suggests the financial crisis could be expected to have four principal effects on the interlock structure. First, fissures in the structure, created by the exit of highly connected or otherwise central major players, and a general weakening of the effectiveness of the 'corporate scan'. Second, an expansion in board size, particularly with links to financial institutions, as firms attempted to co-opt resources to compensate for the disruption to funding lines and other sources of uncertainty. Third, in a contradictory manner decreased and increased executive director activism associated with both the withdrawal from specific exposed positions and specific attempts to capitalise on new opportunities created by the disruption. And fourth, increased executive director activism in political forums, aimed at securing a regulatory framework less vulnerable to such disruption in the future.
The findings are generally consistent with the theoretical expectations, revealing a dramatic disruption to the network and contraction of the main component, associated with the withdrawal of major players. Board size expands in a manner consistent with uncertainty reduction and contradictory trends in executive director activism are apparent.
The seminar will continue in the pub afterwards, as usual.
We hope to see you there,
Elisa and Martin
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