Social distinctions of directors and firm performance

What is it about?

The paper highlights the significance of the social distinction of members of corporate boards in a country where such distinctions seem to matter. It shows that such a distinction can act as patronage, whereby it signals the firm's capacity to access resources and privileges, which can benefit it by improving its financial performance. Our indicator of social distinction is the prenominal titles of directors in the Malaysian setting. To ascertain their effectiveness, we study whether these titles proxy or complement the benefits derived by the firm from political connections, an issue studied in prior literature.

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