Posted: 15 Apr 2010
Date Written: March 1, 2009
An interlock between two firms occurs if the firms share one or more directors in their boards of directors. We explore the effect of interlocks on firm performance for a sample of 250 French companies using a large and new panel database. We use two different performance measures (Return On Assets and Tobin's Q).
Based on all findings we conclude that there is a significant association between network position and performance. Based on the way it is linked to other firms in the network, a firm's position in a network has been shown to have effect on the performance of a firm. In other words, we conclude that the firm's performance is a function of the position of a company to others in the whole network. The results suggest that the location of firms in these networks is more important than simply the number of ties.
Keywords: firm performance, interlocks, network position
JEL Classification: C23, J53, G32, G34, Z13
Suggested Citation: Suggested Citation
Elouaer Mrizak, Sana, Interlocking Directorates and Firm Performance: Evidence from French Companies (March 1, 2009). Available at SSRN: https://ssrn.com/abstract=1589663