Learning from failures: Director interlocks and corporate misconduct

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buir.contributor.authorŞensoy, Ahmet
buir.contributor.orcidŞensoy, Ahmet|0000-0001-7967-5171
dc.citation.epage102406- 16en_US
dc.citation.spage102406- 1en_US
dc.citation.volumeNumber84en_US
dc.contributor.authorWang, Z.
dc.contributor.authorYao, S.
dc.contributor.authorŞensoy, Ahmet
dc.contributor.authorGoodell, J. W.
dc.contributor.authorCheng, F.
dc.date.accessioned2023-02-16T09:58:17Z
dc.date.available2023-02-16T09:58:17Z
dc.date.issued2022-10-20
dc.departmentDepartment of Managementen_US
dc.description.abstractMotivated by social learning and social network theories, we argue that firms learn from failures in their director interlocked firms. Empirical results show that enforcement for violations in errant firms inhibit misconduct commitments in focal firms (i.e., firms interlocked with errant firms). We investigate the role of interlocking directors in facilitating the inhibition of misconduct. Empirical results evidence that information transmission by interlocking directors plays a crucial role in the process of inhibitive learning. Besides information transmission, we also find that interlocking directors react with higher diligence in focal firms. Further, overall diligence of independent directors in focal firms is heightened. Additionally, we test several factors that influence the significance of this inhibition, including characteristics of interlocking directors, firm features, and industry characters. Finally, the enforcement can deter more than one form of misconduct in focal firms. Overall, we thoroughly investigate the reactions of focal firms and their directors. Our study focuses on inhibitive learning, which has received limited attention in corporate finance literature.en_US
dc.description.provenanceSubmitted by Ezgi Uğurlu (ezgi.ugurlu@bilkent.edu.tr) on 2023-02-16T09:58:17Z No. of bitstreams: 1 Learning_from_failures_Director_interlocks_and_corporate_misconduct.pdf: 655864 bytes, checksum: f40bf26a1f015bc5d6f86ad651f5dec1 (MD5)en
dc.description.provenanceMade available in DSpace on 2023-02-16T09:58:17Z (GMT). No. of bitstreams: 1 Learning_from_failures_Director_interlocks_and_corporate_misconduct.pdf: 655864 bytes, checksum: f40bf26a1f015bc5d6f86ad651f5dec1 (MD5) Previous issue date: 2022-10-20en
dc.embargo.release2024-10-20
dc.identifier.doi10.1016/j.irfa.2022.102406en_US
dc.identifier.issn1057-5219
dc.identifier.urihttp://hdl.handle.net/11693/111424
dc.language.isoEnglishen_US
dc.publisherElsevier BVen_US
dc.relation.isversionofhttps://doi.org/10.1016/j.irfa.2022.102406en_US
dc.source.titleInternational Review of Financial Analysisen_US
dc.subjectDirector interlocksen_US
dc.subjectInhibitive learningen_US
dc.subjectCorporate misconducten_US
dc.subjectSocial networksen_US
dc.subjectCorporate governanceen_US
dc.titleLearning from failures: Director interlocks and corporate misconducten_US
dc.typeArticleen_US

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