Top management teams' social capital in Taiwan. The impact on firm value in an emerging economy

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14 Citations (Scopus)


Purpose - The paper aims to examine the contributions of top management teams' (TMTs) social capital to the creation of business value. Design/methodology/approach - Least-squares regression is used to estimate the relationship between TMT social capital and Tobin's Q, while controlling for other firm- and industry-specific explanatory variables. Findings - The empirical results show that it is TMT extra-business group (but not intra-business group) directorate ties that are viewed as valuable strategic assets by the marketplace, and the benefits of extra-business group directorate ties mainly come from the relationships' greater prominence, but not from the relationships' wider span or better position. Research limitations/implications - Past research has tended to focus on "who executives are" - their background, personality, etc. Since the results show that executives' extra-business group social capital is strategically valuable, future research should take note that "whom executives know" - i.e. their social capital - is equally relevant to firm value. Practical implications - The prominence and prestige measures of a TMT's extra-business group network can be used by managers, external analysts and investors to assess to what extent firms are capable of leveraging relationships with other firms, and thereby better predict future firm performance and value. Originality/value - This study contributes to the literature by investigating the differential effects of TMT intra- and extra-business group directorships on firm values. Evidence from the present study may serve as a step toward understanding the role of TMT social capital in creating potentially valuable intangible assets in emerging economies dominated by business groups.

Original languageEnglish
Pages (from-to)177-190
Number of pages14
JournalJournal of Intellectual Capital
Issue number2
Publication statusPublished - 2005 Jun 13

All Science Journal Classification (ASJC) codes

  • Education
  • Business, Management and Accounting(all)


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