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In the shadow of the interlocking directorates regulation. A comparative case study

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  • Alberto Baccini
  • Leonardo Marroni

Abstract

- Network analysis techniques are used for investigating the probable effects of a change in the regulation that aims to prevent the anticompetitive effects of the crossed presence of the same administrators in the boards of directors of competing firms, known as interlocking directorates (ID). The case study considered is a recent Italian law (Section 36 of Law Decree n. 201/2011) which prohibits ID on the boards of credit, insurance and financial companies. The ID networks of the top-100 Italian listed companies and of the financial companies in this same list are considered and compared with the analogous networks in the U.S.. The U.S. networks represent a benchmark given that in the U.S. companies act in the shadow of the Section 8 of the Clayton Act that has banned ID since 1914. The effects on the ID networks of the new Italian law are simulated under two different interpretations of the law. If the law will be applied according to a narrow interpretation, Italian ID network will rest substantially unaltered. On the other hand if the law will be applied according to a broad interpretation, the ID network for financial firms will be completely modified with a network configuration very similar to the American benchmark.

Suggested Citation

  • Alberto Baccini & Leonardo Marroni, 2013. "In the shadow of the interlocking directorates regulation. A comparative case study," Department of Economics University of Siena 683, Department of Economics, University of Siena.
    • Handle: RePEc:usi:wpaper:683
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    References listed on IDEAS

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    1. Alberto Baccini & Lucio Barabesi, 2010. "Interlocking editorship. A network analysis of the links between economic journals," Scientometrics, Springer;Akadémiai Kiadó, vol. 82(2), pages 365-389, February.
    2. Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
    3. Alberto Rinaldi & Michelangelo Vasta, 2003. "The structure of Italian capitalism, 1952-1972: New evidence using the interlocking directorates technique," Department of Economics 0426, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    4. Francisco Enrique Gonzalez-Diaz, 2012. "Minority Shareholdings And Interlocking Directorships: The European Union Approach," Antitrust Chronicle, Competition Policy International, vol. 12.
    5. Rinaldi, Alberto & Vasta, Michelanelo, 2005. "The Structure of Italian Capitalism, 1952 1972: New Evidence Using the Interlocking Directorates Technique," Financial History Review, Cambridge University Press, vol. 12(02), pages 173-198, October.
    6. Luca Enriques & Paolo Volpin, 2007. "Corporate Governance Reforms in Continental Europe," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 117-140, Winter.
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    Cited by:

    1. Carlo Drago & Roberto Ricciuti & Paolo Santella, 2015. "An Attempt to Disperse the Italian Interlocking Directorship Network: Analyzing the Effects of the 2011 Reform," Working Papers 2015.82, Fondazione Eni Enrico Mattei.

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    More about this item

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • G2 - Financial Economics - - Financial Institutions and Services
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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