A&F Research Community Seminar – Professor Sabur Mollah

Title: Do Social Networks Benefit Bank Shareholders? An Empirical Analysis on the Social Networks of Independent Directors

Guest Speaker: Professor Sabur Mollah, Chair in Financial Management, Sheffield University Management School

16 March 2022, 16:00-17:00

NUBS 3.15/Zoom

Abstract 
A large number of studies report contradictory results concerning the relationship between board independence and risk-taking. By using a sample of 424 US banks for the period of 2000-2020, we find that highly connected independent directors serve shareholders by engaging in high risk taking activities. We also show that strong network connections provide superior access to information for independent directors and consequently, these directors use the information for risk aggressive investments. The results remain after robustness checks and endogeneity tests. In the cross sectional analysis, we find that the results are more pronounced for complex banks and banks with higher equity capital, higher income diversity, and higher cost efficiency. The study makes important contributions to director social network literature.

Zoom link: https://newcastleuniversity.zoom.us/j/87004078559

Please register your attendance using the following link: https://forms.ncl.ac.uk/view.php?id=13837247.