Managerial Networks and Shareholder Value: Evidence from Sudden Deaths

Kirsten Tangaa Nielsen, Felix von Meyerinck

Research output: Working paperResearch


This paper investigates the causal effect of connections among top executives and directors of different firms on shareholder value using a quasi-natural experiment. Our identification strategy rests on the idea that sudden deaths trigger unexpected and exogenous dissolutions of connections, which enables us to isolate the value of managerial connections by studying stock price reactions at firms where managers connected to a suddenly deceased manager work. Our results show that firms connected to a suddenly deceased manager experience a statistically significant reduction in shareholder value between 1.6 and 2.6 million USD, which is consistent with the notion that managerial connections foster shareholder value. When exploring the cross-sectional variation, we find evidence that connections to inside directors, connections established via previously shared work engagements, and within-industry connections are most valuable.
Original languageEnglish
Place of PublicationSt. Gallen
PublisherUniversität St. Gallen
Number of pages62
Publication statusPublished - 2 Oct 2018
SeriesWorking Paper of Finance


  • Social networks
  • Firm value
  • Sudden death

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