Directors network centrality and earnings quality

Bright Gershion Godigbe, Chin Man Chui*, Chih Liang Liu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


This study examines whether firms with network central boards of directors behave differently from other firms in terms of financial reporting quality. We find that earnings quality among firms is low when board networks are channels of incorrect information transmission (including earnings management information) and for firms whose directors are awarded equity-based compensation have connections through boardroom networks, but earnings quality is better for firms with good performance in spite of their networks. These results are robust to controlling for firm information environment, growth, size, age, leverage, performance, volatility in firm operations, and corporate governance.

Original languageEnglish
Pages (from-to)5381-5400
Number of pages20
JournalApplied Economics
Issue number50
StatePublished - 27 Oct 2018


  • director network centrality
  • discretionary accruals
  • Earnings quality
  • financial reporting quality

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