You've Got a Friend: Examining Board Interlock Formation After Financial Restatements Academic Article

abstract

• We investigate the impact of financial restatements as critical events that influence board interlock formation among Fortune 500 firms during the 20092013 period. Our empirical study is based on a longitudinal analysis of tie formation while accounting for dynamic changes in the behavior and characteristics of network nodes using stochastic actor-oriented models. We find that firms facing financial restatements experience disruption in network ties. However, social status helps mitigate these effects, and restating firms build new ties through socially embedded processes, such as reciprocity and transitivity. Our work contributes to the understanding of how interorganizational relationships are altered as a result of financial restatement events.

authors

• Withers, Michael

published proceedings

• ORGANIZATION SCIENCE

altmetric score

• 0.5

author list (cited authors)

• Withers, M. C., Howard, M. D., & Tihanyi, L.

citation count

• 6

complete list of authors

• Withers, Michael C||Howard, Michael D||Tihanyi, Laszlo

publication date

• January 2020

publisher

• Institute for Operations Research and the Management Sciences (INFORMS)  Publisher

published in

• Organization science  Journal

keywords

• Board Interlocks
• Corporate Governance
• Financial Restatements
• Social Networks
• Stigma

Digital Object Identifier (DOI)

• 10.1287/orsc.2019.1319

start page

• 742

end page

• 769

volume

• 31

issue

• 3

URL

• http://dx.doi.org/10.1287/orsc.2019.1319