Organizational Bankruptcy: The Consequences of Failure on Director Human and Social Capital

Authors

  • Drake Mullens Tarleton State University, TX

DOI:

https://doi.org/10.11634/216796061706497

Abstract

We develop a model to explore the changes in human and social capital for directors on the board of a failed firm subsequent to organizational bankruptcy. With arguments rooted in signaling theory (Spence, 1973), we propose a negative relationship between bankruptcy and new director appointments, in addition to a negative relationship between bankruptcy and the prestige of directorships. We then develop propositions on how board tenure, board size, initial social capital, and frequency of bankruptcies in an industry moderate the negative relationship between organizational failure with human and social capital.

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Published

04/02/2014

How to Cite

Mullens, D. (2014). Organizational Bankruptcy: The Consequences of Failure on Director Human and Social Capital. American Journal of Business and Management, 3(1), 52–59. https://doi.org/10.11634/216796061706497

Issue

Vol. 3 No. 1 (2014)

Section

Articles

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