# Disentangling Director Attributes: Human Capital versus Social Capital of Directors
## 5 Multivariate Analysis
### Main Regression Analysis
The positive association between human capital and connectivity suggests that directors with more human capital are also better connected. The coefficient suggests that a director at the 75 th percentile of \(HCl\) (7.5) achieves an \(AGG\) score that is 0.63 higher than a director at the 25 th percentile of \(HCl\) (4.20).1 The coefficients on \(FEM\) and \(NZ\) are positive and significant, suggesting that women and directors who live in New Zealand are better connected than men and directors who live overseas. This evidence demonstrates a positive relationship between human capital and social capital. Directors with more skills, experience, and knowledge typically have more board connectivity. Achieving a greater level of connectivity can be achieved by directors being appointed to boards that are located at the center of the board network, multiple boards, or larger boards, and directors may earn these appointments because of the demand for their human capital. \begin{table}
\begin{tabular}{c c c c c c} \hline \hline  & **1** & **2** & **3** & **4** & **5** \\ \hline  & **AGG** & **AGG** & **AGG** & **AGG** & **AGG** \\ \hline  & **OLS** & **OLS** & **OLS** & **FE** & **FE** \\ \hline Constant & \(-0.920\)*** & \(-2.025\)*** & \(-2.659\)*** & \(-0.979\)** & \(-2.060\)*** \\  & \((-9.24)\) & \((-19.19)\) & \((-12.99)\) & \((-2.44)\) & \((-7.91)\) \\ HCI & \(0.191\)*** & \(0.070\)*** & \(0.085\)*** & \(0.194\)*** & \(0.056\)*** \\  & \((12.69)\) & \((7.77)\) & \((7.85)\) & \((10.10)\) & \((5.39)\) \\ FEM & \(0.216\)** & \(0.103\) & \(0.163\)* & \(0.000\) & \(0.000\) \\  & \((2.31)\) & \((1.38)\) & \((1.79)\) & \(()\) & \(()\) \\ NZ & \(0.419\)*** & \(-0.038\) & \(0.038\) & \(0.803\) & \(0.290\) \\  & \((6.76)\) & \((-0.80)\) & \((0.64)\) & \((1.43)\) & \((0.83)\) \\ DIR & & \(1.700\)*** & \(1.688\)*** & & \(1.652\)*** \\  & & \((18.41)\) & \((17.80)\) & & \((21.68)\) \\ AGE & & & \(0.001\) & & \\  & & & \((0.24)\) & & \\ \hline Observations & 12,211 & 12,211 & 7400 & 12,211 & 12,211 \\ R2 & 0.126 & 0.498 & 0.554 & 0.110 & 0.484 \\ F Stat & 17.93 & 44.41 & 36.91 & 14.85 & 48.27 \\ p(F) & 0.000 & 0.000 & 0.000 & 0.000 & 0.000 \\ Year fixed effects & Y & Y & Y & Y \\ \hline \hline \end{tabular} This table presents results for OLS regressions where each observation represents a director for a given year between 2000 and 2015. The dependent variable, \(AGG\), is the PCA connectivity factor. \(HCl\) is the human capital index score for a director, \(FEM\) is a dummy variable that equals 1 if a director is a woman. \(NZ\) is a dummy if the director was domiciled in New Zealand, \(DIR\) is the number of directorships for a director. Age is the age of a director in the sample year. The \(t\)-statistics are reported in parentheses below coefficients and are based upon robust standard errors clustered at the director level. Year dummies are included but not shown. * \(p<0.10\), ** \(p<0.05\), *** \(p<0.01\).  
\end{table} 
Table 5: OLS regressions for the relationship between human and social capital. Column 2 of Table 5 provides the results after including _DIR_ as a control variable. We observe a strong positive association between _DIR_ and _AGG_, suggesting that a director who is appointed to an additional board increases their _AGG_ score by around 1.7 points (just over 1 standard deviation). This result is expected as more board positions provide more access to other directors and therefore result in higher connectivity and greater social capital. More directorships also increase the opportunity to control information in the network (measured by betweenness, which requires serving on at least 2 boards). The coefficient on _HCI_ is still positive and significant but loses some explanatory power, although we observe a marked increase in the r-square compared with column 1. This evidence suggests that greater connectivity is positively related to human capital after controlling for the number of boards a director sits on. Column 3 of Table 5 includes AGE as a control variable.