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Incidence and performance effects of interlocking directorates in emerging market business groups: Evidence from India

Author

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  • Bikram De

    (Indira Gandhi Institute of Development Research)

Abstract

The phenomenon of interlocking directorates is widespread among corporate across the world. This paper studies the structure and extent of interlocking directorates within Indian business groups and analyses the performance effects of such interlocks. It finds that large groups tend to have more interlocks and more heterogeneous the group is, lesser are the interlocks. Finance and trading companies are seen to have a higher intensity of interlocks and holding companies occupy important nodes in the directorial network. The paper also shows that directorial interlocks improve the performance of group-affiliated firms.

Suggested Citation

  • Bikram De, 2003. "Incidence and performance effects of interlocking directorates in emerging market business groups: Evidence from India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2003-001, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2003-001
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    File URL: http://www.igidr.ac.in/pdf/publication/WP-2003-001.pdf
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    References listed on IDEAS

    as
    1. Ranjay Gulati & Nitin Nohria & Akbar Zaheer, 2000. "Strategic networks," Strategic Management Journal, Wiley Blackwell, vol. 21(3), pages 203-215, March.
    2. Thomas Koenig & Robisrt Gogel & John Sonquist, 1979. "Models of the Significance of Interlocking Corporate Directorates," American Journal of Economics and Sociology, Wiley Blackwell, vol. 38(2), pages 173-186, April.
    3. Kali, Raja, 1999. "Endogenous Business Networks," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(3), pages 615-636, October.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. ROMMENS, An & CUYVERS, Ludo & DELOOF, Marc, 2007. "Interlocking directorates and business groups: Belgian evidence," Working Papers 2007023, University of Antwerp, Faculty of Business and Economics.
    2. Aylin Ataay, 2016. "Roles of Interlocking Directorates in an Emerging Country: Control and Coordination in Family Business Groups," Eurasian Journal of Business and Management, Eurasian Publications, vol. 4(2), pages 106-116.
    3. Bandyopadhyay, Arindam & Barua, Nandita Malini, 2016. "Factors determining capital structure and corporate performance in India: Studying the business cycle effects," The Quarterly Review of Economics and Finance, Elsevier, vol. 61(C), pages 160-172.

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    More about this item

    Keywords

    Interlocking directorates; board structure; corporate governance;
    All these keywords.

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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