Small world of inter-firm network and firm's acquisition behaviour

Shreya Biswas

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: This study finds that the inter-firm network in India on account of director interlocks is a small world and the network has become more integrated since the introduction of corporate governance regulations in the country. Using a sample of National Stock Exchange listed firms in India the study finds a negative relation between average path length and probability of acquiring indicating the importance of faster reach of information among the firms within the network. The paper also finds a non-linear relation given by inverted U-shaped curve between firm level clustering and probability of acquiring. Initially, increase in clustering has a positive effect through the informational quality effect; however at higher levels the negative informational redundancy effect dominates leading to a curvilinear relation.

Keywords: Corporate governance; Small-world; Director interlocks; Inter-firm network (search for similar items in EconPapers)
JEL-codes: G32 G34 G38 M21 Z13 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2016-01
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:ind:igiwpp:2016-003

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