Investing in Connections: Corporate Jets and Firm Value

May 30, 2013 Leave a comment

Investing in Connections: Corporate Jets and Firm Value

Lian Fen Lee Boston College – Carroll School of Management

Michelle Lowry Pennsylvania State University – Mary Jean and Frank P. Smeal College of Business Administration

Susan Shu Boston College – Carroll School of Management

May 1, 2013

Abstract: 
Executives’ connections have been shown to benefit firms, yet we know little about firms’ efforts to foster connections. Using corporate jet flight data, we examine firms’ efforts to foster connections via face-to-face interactions. Such interactions can increase firm value by enhancing information flow. However, they can decrease firm value if individuals devote firm resources to pursue connections that further their own agendas. We find jet flights increase firm value if the information role prevails, such as when jets fly to subsidiaries. In contrast, flights to external locations decrease firm value, but they appear to yield personal benefits for the executives.

Filed under Research

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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