The Complexity of Social Capital: The Influence of Board and Ownership Interlocks on Implied Cost of Capital in an Emerging Market. (14th February 2018)

• Record Type: Journal Article
• Authors: Rossoni, Luciano; Aranha, Cezar Eduardo; Mendes-Da-Silva, Wesley
• Other Names: Tabak Benjamin M. Academic Editor.
• Is Part Of: Complexity. Volume 2018(2018)
• Publication Date: 2018-02-14
• Subjects: Chaotic behavior in systems -- Periodicals; Complexity (Philosophy) -- Periodicals; 003
• DOI: 10.1155/2018/6248427
• Languages: English
• ISSNs: 1076-2787

Abstract

Abstract : Starting from sociological perspectives on complexity, we show how the social capital of boards and owners networks affects the implied cost of capital of companies listed on Brazilian stock exchange. We specifically show arguments and evidence that the effect of the relational resources found in the direct, indirect, and heterogeneous board's ties reduces the cost of capital while relational resources embedded in shareholder networks increase the cost of capital. Our results show that while the increase in the relational resources of the board reduces the implied cost of capital, an increase in these shared resources in the ownership relationships of the firm increases the cost of financial capital.