IDEAS home Printed from https://ideas.repec.org/a/kap/jincot/v15y2015i4p351-362.html

Interlocking Directorates and Concentration in the Italian Insurance Market

Author

Listed:
  • Giovanni Bartolomeo

  • Paolo Canofari

Abstract

The Italian insurance market represents a peculiar and puzzling case within the European Single Market. Since the radical deregulation process in 1992, standard indicators have shown a low degree of market concentration. However, at the same time, Italian insurance costs still remain among the highest in Europe due to the existence of widespread collusive practices, which have been largely documented by both the Italian Antitrust Authority and empirical evidence. The main channel of anti-competitive behavior seems to be related to the exchange of information. To improve the understanding of its structure, our paper studies interlocking linkages among firms operating in the Italian insurance market. Interlock linkages are apparent when single directors sit on more than one company’s board. Thus, interlock linkages can be viewed as a systemic channel of information exchange and a potential source of collusive practices. We distinguish interlock linkages occurring within and between groups operating under a common ownership because companies operating in the insurance sector may be organized in multi-brand holdings. Therefore, we disentangle interlocking directorates as holding business strategies from systemic structures that might represent potential threats for the market competition. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Giovanni Bartolomeo & Paolo Canofari, 2015. "Interlocking Directorates and Concentration in the Italian Insurance Market," Journal of Industry, Competition and Trade, Springer, vol. 15(4), pages 351-362, December.
    • Handle: RePEc:kap:jincot:v:15:y:2015:i:4:p:351-362
    DOI: 10.1007/s10842-015-0199-3
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10842-015-0199-3
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10842-015-0199-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Carlos Drago & Francesco Millo & Roberto Ricciuti & Paolo Santella, 2011. "Corporate Governance Reforms, Interlocking Directorship Networks and Company Value in Italy (1998-2007)," CESifo Working Paper Series 3322, CESifo.
    2. Francis Kramarz & David Thesmar, 2013. "Social Networks In The Boardroom," Journal of the European Economic Association, European Economic Association, vol. 11(4), pages 780-807, August.
    3. Jensen, Michael C. & Meckling, William H., 2008. "Theory of the firm: managerial behavior, agency costs and ownership structure," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 48(2), April.
    4. Born, Patricia H, 2001. "Insurer Profitability in Different Regulatory and Legal Environments," Journal of Regulatory Economics, Springer, vol. 19(3), pages 211-237, July.
    5. Donatella Porrini, 2004. "Information Exchange as Collusive Behaviour: Evidence from an Antitrust Intervention in the Italian Insurance Market," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 29(2), pages 219-233, April.
    6. Giuseppe Turchetti & Cinzia Daraio, 2004. "How Deregulation Shapes Market Structure and Industry Efficiency: The Case of the Italian Motor Insurance Industry," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 29(2), pages 202-218, April.
    7. Rüdiger Fahlenbrach & Angie Low & René M. Stulz, 2010. "The Dark Side of Outside Directors: Do they Quit When They are Most Needed?," Swiss Finance Institute Research Paper Series 10-17, Swiss Finance Institute.
    8. repec:ucp:bkecon:9780226531083 is not listed on IDEAS
    9. Renee B. Adams & Benjamin E. Hermalin & Michael S. Weisbach, 2010. "The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 58-107, March.
    10. Hallock, Kevin F., 1997. "Reciprocally Interlocking Boards of Directors and Executive Compensation," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 32(3), pages 331-344, September.
    11. Valeria Falce, 2013. "Interlocking Directorates: An Italian Antitrust Dilemma," Journal of Competition Law and Economics, Oxford University Press, vol. 9(2), pages 457-472.
    12. Davide Carbonai & Giovanni Di Bartolomeo, 2006. "Interlocking directorates as a trust substitute: The case of the Italian non-life insurance industry," CIMEO Working Paper Series 1, Centre for Investigation and Modelling of Experimental Observations (CIMEO).
    13. Dooley, Peter C, 1969. "The Interlocking Directorate," American Economic Review, American Economic Association, vol. 59(3), pages 314-323, June.
    14. Paolo Coccorese, 2010. "Information Exchange as a Means of Collusion: The Case of the Italian Car Insurance Market," Journal of Industry, Competition and Trade, Springer, vol. 10(1), pages 55-70, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maria Rosa Battaggion & Vittoria Cerasi, 2018. "Endogenous interlocking directorates," Working Papers 380, University of Milano-Bicocca, Department of Economics, revised 01 May 2018.
    2. Oliver Bischoff & Achim Buchwald, 2018. "Horizontal and Vertical Firm Networks, Corporate Performance and Product Market Competition," Journal of Industry, Competition and Trade, Springer, vol. 18(1), pages 25-45, March.
    3. Panitz Robert & Glückler Johannes, 2023. "Post-Brexit: Do board interlocks make banks take similar relocation decisions?," ZFW – Advances in Economic Geography, De Gruyter, vol. 67(2-3), pages 127-141, August.
    4. Battaggion, Maria Rosa & Cerasi, Vittoria, 2020. "Strategic interlocking directorates," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 85-101.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Donaldson, Jason & Piacentino, Giorgia & Malenko, Nadya, 2017. "Deadlock on the Board," CEPR Discussion Papers 12503, Centre for Economic Policy Research.
    2. Fich, Eliezer M. & White, Lawrence J., 2005. "Why do CEOs reciprocally sit on each other's boards?," Journal of Corporate Finance, Elsevier, vol. 11(1-2), pages 175-195, March.
    3. Dyballa, Katharina & Kraft, Kornelius, 2015. "Does codetermination affect the composition of variable versus fixed parts of executive compensation?," ZEW Discussion Papers 15-053, ZEW - Leibniz Centre for European Economic Research.
    4. Goh, Lisa & Gupta, Aditi, 2016. "Remuneration of non-executive directors: Evidence from the UK," The British Accounting Review, Elsevier, vol. 48(3), pages 379-399.
    5. Dilger, Alexander, 2012. "How (not) to pay non-executive directors," Discussion Papers of the Institute for Organisational Economics 9/2012, University of Münster, Institute for Organisational Economics.
    6. Jonathan A. Christy & Zoltan P. Matolcsy & Anna Wright & Anne Wyatt, 2013. "Do Board Characteristics Influence the Shareholders' Assessment of Risk for Small and Large Firms?," Abacus, Accounting Foundation, University of Sydney, vol. 49(2), pages 161-196, June.
    7. Cavaco, Sandra & Crifo, Patricia & Rebérioux, Antoine & Roudaut, Gwenael, 2017. "Independent directors: Less informed but better selected than affiliated board members?," Journal of Corporate Finance, Elsevier, vol. 43(C), pages 106-121.
    8. Dong Chen, 2014. "The Non-monotonic Effect of Board Independence on Credit Ratings," Journal of Financial Services Research, Springer;Western Finance Association, vol. 45(2), pages 145-171, April.
    9. Rebérioux, Antoine & Roudaut, Gwenael, 2016. "Gender Quota inside the Boardroom: Female Directors as New Key Players?," CEPREMAP Working Papers (Docweb) 1603, CEPREMAP.
    10. Dah, Mustafa A., 2025. "Refreshing boards: Countering CEO entrenchment," Research in International Business and Finance, Elsevier, vol. 75(C).
    11. Buchwald, Achim, 2012. "Welche Unternehmen berufen Vorstandsvorsitzende und andere Vorstände als externe Kontrolleure? Eine empirische Analyse der Präsenz von externen Vorständen in den Aufsichtsräten deutscher Grossunternehmen," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 66(2), pages 93-126.
    12. Evandro de Nez & Paulo Roberto da Cunha, 2018. "Influence of board interlocking in the selection of the audit firm on the mandatory caster," Contaduría y Administración, Accounting and Management, vol. 63(2), pages 5-6, Junio.
    13. Benjamin S. Kay & Cindy M. Vojtech, 2015. "Corporate Governance Responses to Director Rule Changes," Staff Discussion Papers 15-02, Office of Financial Research, US Department of the Treasury.
    14. Abdelrhman Yusuf & Mohamed Sherif, 2020. "All on Board? New Evidence on Board Characteristics from a Large Panel of UK FTSE Indices," Sustainability, MDPI, vol. 12(13), pages 1-26, July.
    15. Ferreira, Daniel & Ginglinger, Edith & Laguna, Marie-Aude & Skalli, Yasmine, 2017. "Board Quotas and Director-Firm Matching," CEPR Discussion Papers 12117, Centre for Economic Policy Research.
    16. Sandra Cavaco & Patricia Crifo & Antoine Rebérioux & Gwenael Roudaut, 2014. "Independent directors: less informed, but better selected? New evidence from a two-way director-firm fixed effect model," Working Papers hal-04141284, HAL.
    17. Riaqa Mubeen & Dongping Han & Jaffar Abbas & Iftikhar Hussain, 2020. "The Effects of Market Competition, Capital Structure, and CEO Duality on Firm Performance: A Mediation Analysis by Incorporating the GMM Model Technique," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    18. Aguilera, Ruth V. & Desender, Kurt A. & Kabbach de Castro, Luiz Ricardo, 2011. "A Configurational Approach to Comparative Corporate Governance," Working Papers 11-0103, University of Illinois at Urbana-Champaign, College of Business.
    19. Paul Tanyi & David B. Smith & Xiaoyan Cheng, 2021. "Does firm payout policy affect shareholders’ dissatisfaction with directors?," Review of Quantitative Finance and Accounting, Springer, vol. 57(1), pages 279-320, July.
    20. Neupane, Biwesh & Thapa, Chandra & Marshall, Andrew & Neupane, Suman & Shrestha, Chaman, 2024. "Do foreign institutional investors improve board monitoring?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 91(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jincot:v:15:y:2015:i:4:p:351-362. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.