Interlocking directorates and dynamic corporate performance: the roles of centrality, structural holes and number of connections in social networks

Wei-Kang Wang (), Wen-Min Lu (), Qian Long Kweh (), Mohammad Nourani and Rong-Suei Hong ()
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Wei-Kang Wang: Yuan Ze University
Wen-Min Lu: National Defense University
Qian Long Kweh: Canadian University Dubai
Rong-Suei Hong: Yuan Ze University

Review of Managerial Science, 2021, vol. 15, issue 2, No 10, 437-457

Abstract: Abstract This study investigates how interlocking directorates affect dynamic corporate performance among 187 Taiwanese electronics companies during a 3 year sampling period (2013–2015). This study consists of two stages. First, this study measures the operational efficiency of electronics companies using the dynamic slacks-based measure model of data envelopment analysis. Second, this study adopts a truncated-regression model with bootstrap to examine the impacts of interlocking directorates on dynamic corporate performance. The empirical findings of this study indicate that centrality (direct connections), structural holes (indirect connections), and the number of connections (total connections) related to interlocking directorates have significant positive influences on the dynamic corporate performance of Taiwanese electronics companies. The results suggest that more interlocks at the board level leads to better corporate performance over a long-term period. Overall, this study uses social network analysis to shed light on the role of interlocking directorates and its importance to dynamic corporate performance from the resource dependence perspective.

Keywords: Social network; Interlocking directorates; Corporate performance; Data envelopment analysis; Dynamic slacks-based measure; 90B50; 90C39; 91D30 (search for similar items in EconPapers)
JEL-codes: G30 L1 L25 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11846-019-00347-2

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