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Horizontal and Vertical Firm Networks, Corporate Performance and Product Market Competition

Author

Listed:
  • Oliver Bischoff

    (Monopolies Commission
    Frankfurt University of Applied Sciences)

  • Achim Buchwald

    (Federal University of Applied Administrative Sciences
    Düsseldorf Institute for Competition Economics)

Abstract

This paper sheds new light on the assessment of firm networks via multiple directorships in terms of corporate firm performance. Using a large sample of European listed firms in the period from 2003 to 2011 and system GMM we find a significant compensation effect on corporate firm performance for the initial negative effect of horizontal multiple directorships by product market competition. In markets with effective competition, horizontal multiple directorships turn out to be an efficient mechanism to increase firm performance and thus assure competitive advantages. By contrast, linkages between up- and downstream firms have no significant influence on financial performance, irrespective of the level of competition intensity.

Suggested Citation

  • 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.
    • Handle: RePEc:kap:jincot:v:18:y:2018:i:1:d:10.1007_s10842-017-0250-7
    DOI: 10.1007/s10842-017-0250-7
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    More about this item

    Keywords

    Horizontal and vertical firm networks; Multiple directorships; Corporate governance; Product market competition; Dynamic panel;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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