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Navigating competitor networks: The influence of geographic density on corporate governance

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  • Lin, Jiaju
  • Leung, Henry
  • Westerholm, Joakim

Abstract

This study examines the impact of geographic density on corporate governance, focusing on board characteristics and CEO compensation in U.S. publicly listed firms. Using a novel measure of geographic density, our analysis reveals that firms within dense competitive networks tend to have smaller, more independent boards, and attract executives with superior educational backgrounds and extensive professional networks. Additionally, geographic density is associated with higher CEO compensation, emphasizing the strategic importance of competitive environments in shaping governance practices. These findings suggest that geographic density enhances board effectiveness and strategic decision-making, offering insights into how firms can leverage competitive networks to improve governance outcomes. A subsample analysis of selected states reveals regional variations, demonstrating that the effects of geographic density can differ by location, thereby offering a deeper understanding of geographic context in corporate governance.

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  • Lin, Jiaju & Leung, Henry & Westerholm, Joakim, 2025. "Navigating competitor networks: The influence of geographic density on corporate governance," International Review of Economics & Finance, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:reveco:v:102:y:2025:i:c:s105905602500440x
    DOI: 10.1016/j.iref.2025.104277
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