Corporate Governance Reforms, Interlocking Directorship Networks and Company Value in Italy, 1998-2007

48 Pages Posted: 14 Jul 2012

See all articles by Carlo Drago

Carlo Drago

University of Rome "Niccolò Cusano"

Francesco Millo

Bonfiglioli Group

Roberto Ricciuti

University of Verona - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Paolo Santella

Single Resolution Board

Date Written: July 13, 2012

Abstract

In this paper we analyze the effects of corporate governance reforms on interlocking directorship, and assess the relationship between interlocking directorships and company value for the main Italian companies listed on the stock exchange over 1998-2007. Using a unique dataset that includes two groups of variables: (i) corporate governance variables related to the board size and the interlocking directorships and (ii) another group of variables related to the economic and financial performance of the companies considered. We find that interlocking directorships are negatively related with company performance with one- or two-year delay, and that the corporate governance reforms introduced over the period considered showed some effectiveness by slightly dispersing the network of companies.

Keywords: Corporate Governance, Interlocking Directorships, Social Network Analysis, Empirical Corporate Finance

JEL Classification: C33, G34, G38, L14

Suggested Citation

Drago, Carlo and Millo, Francesco and Ricciuti, Roberto and Santella, Paolo, Corporate Governance Reforms, Interlocking Directorship Networks and Company Value in Italy, 1998-2007 (July 13, 2012). Available at SSRN: https://ssrn.com/abstract=2105693 or http://dx.doi.org/10.2139/ssrn.2105693

Carlo Drago

University of Rome "Niccolò Cusano" ( email )

Via Don Carlo Gnocchi, 3
Rome, 00166
Italy

Francesco Millo

Bonfiglioli Group ( email )

Via papa giovanni XXIII 7 c/o Bonfiglioli RIduttor
Lippo di Caldereara, Bologna, Bologna 40012
Italy

Roberto Ricciuti (Contact Author)

University of Verona - Department of Economics ( email )

Via dell'Artigliere, 8
37129 Verona
Italy

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Paolo Santella

Single Resolution Board

Rue de la Science 27
Bruxelles, 1000
Belgium

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