Director Histories and the Pattern of Acquisitions

57 Pages Posted: 29 Aug 2011 Last revised: 19 Apr 2016

See all articles by Peter L. Rousseau

Peter L. Rousseau

Vanderbilt University - Department of Economics

Caleb Stroup

Davidson College

Date Written: June 17, 2013


We trace directors through time and across firms to study whether acquirers' access to non-public information about potential targets via their directors' past board service histories affects the market for corporate control. In a sample of publicly-traded U.S. firms, we find acquirers about 4.5 times more likely to buy firms where their directors once served. Effects are stronger when the acquirer has better corporate governance, the interlocked director has a larger ownership stake at the acquirer, or the director played an important role during past service. The findings are robust to endogeneity of board composition and controls for contemporaneous inter-firm interlocks.

Keywords: interlocking directorates, board networks, social networks, corporate governance

JEL Classification: G34

Suggested Citation

Rousseau, Peter L. and Stroup, Caleb, Director Histories and the Pattern of Acquisitions (June 17, 2013). Journal of Financial and Quantitative Analysis (JFQA), Vol. 50, No. 4, 2015, Available at SSRN: or

Peter L. Rousseau (Contact Author)

Vanderbilt University - Department of Economics ( email )

Box 1819 Station B
Nashville, TN 37235
United States
615-343-2466 (Phone)
615-343-8495 (Fax)


Caleb Stroup

Davidson College ( email )

United States


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