Do Interlocking Directors Contribute to Exploration? A Resource Dependence Perspective

Deepali Dhingra and Neeraj Dwivedi
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Deepali Dhingra: Indian Institute of Management Rohtak, Haryana, India
Neeraj Dwivedi: Indian Institute of Management Kashipur, Uttarakhand, India

American Business Review, 2026, vol. 29, issue 1, 264-286

Abstract: The composition of a diverse board of directors is crucial in driving innovation within a firm. One of the diversifying factors that has received significant attention in the literature is the presence of interlocking directors on the board. However, despite existing research on the effect of their presence on boards, we know relatively little about how such directors help the firms decide on specific innovation projects to invest in. We examine the relationship between the presence of interlocking directors on the board and the firm’s tendency to undertake exploratory innovation projects using negative binomial regression, as viewed through the lens of resource dependence theory. We suggest that interlocking directors and the firm’s investment decisions in exploration projects are positively related, thereby contributing to the corporate governance and innovation literatures. The paper highlights how board composition through interlocks enhances networking and information flow, improving strategic decisions. The paper advances the idea that interlocking directors enhance firms’ innovative capabilities by promoting exploratory decision-making. Further, the moderating effects of CEO ownership and average board tenure of interlocked directors have also been discussed.

Keywords: Exploration; Interlocking Directors; Resource Dependence Theory (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ambsrv:022668

DOI: 10.37625/abr.29.1.264-286

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