Two Essays on Social Ties and Economic Outcomes

In this dissertation, I examine the influence of social connections on economic outcomes at the firm level in the US. The first study examines how social ties between successive CEOs influence firm policy changes enacted by the incoming CEOs. The results indicate a potential criterion the nomination committee should consider when selecting new CEOs. The second study examines the impact of social ties between the audit committee chair and the external auditor on audit quality. The results collectively indicate that ties between the auditor and the client facilitate information transfers and support the potential benefits of social ties in economic decision-making.