Firm Social Network, Information Opacity and Firm Value

<p>We find that a firm’s social network size improves its information environment quality, consistent with social capital theory that networks enable valuable information flow, trust, and truthful sharing. This effect is more pronounced for complex firms with diverse customers, regulations, and coordination issues. Firm social network size also positively affects firm value, mediated by enhanced information quality. The study employs multiple linear regression, Heckman two-step selection, propensity score matching, entropy balancing, and two-stage least squares methods.</p>