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Working paper

Did relational capital matter during the financial crisis?

Anna A. Bykova, Evgeniia V. Kuminova.
This paper aims to contribute to the body of empirical studies that address the importance of investments in companies’ relationships and the way in which they influence value creation in the global economic crisis. We employ linear panel analysis using the Hausman–Taylor model to analyse panel data for companies from the five largest European countries in the period 2004–2011. Different types of exogenous and endogenous links which a company could have in different stages of the crisis are investigated. The findings suggest that there is a statistically significant and positive link between relational capital and a firm’s value. Moreover we identify several differences in the significance of the inputs during different crisis periods. The study provides both theoretical and practical insights into investments in intangibles for framing strategy decisions with a particular focus on the role of relational capital. This could provide scholars and practitioners with a working basis for understanding connections and the implications of strategizing in the context of a company’s networks.