Interlocking Director Network、social Capital And Corporate Performance

As China becoming the second economy in the world, the organization structure, management and technology level in enterprises are changing in several aspects. On the one hand, the firm performance is affected by the internal management. On the other hand, it is also influenced by network among different firms. In recent years, based on a new aspect on studies of social network relationship, the phenomenon of relationships among boarder officers is becoming normal. Therefore, the interlock network has become an important way to connect other companies without limited by boundaries. Specifically, the social capital can help the company to get the information, trust and reputation, which influences the corporate performance. However, because of the narrow perspective, the current studies still have limitations. The topic of director of network is becoming popular in recent years.Combining social network analysis theory and social capital theory, this paper will analyzecorporations’ ability of collecting social capital under the influence of interlocking director network from two aspects. After that,this paper will use the empirical tests to analyze the influence of Interlocking Director Network on corporate performance, by using the sample of Ashares in Shanghai market from 2010 to 2013. To be specific, there are three frameworks influencing the director of network:Firstly,How does the weak relationship in director network influence the corporate performance?Secondly,How does the scale of director of network influence the corporate performance?Last but not least,How does the centrality of director of network influence the corporate performance?Additionally, this paper will use MATLAB,UCINET social network analysis and STATA regression analysis, and construct a frameworkof relationship between director of network and corporate performance. There are three results from empirical tests. Firstly, there is a negative correlation between the number of independent director in Interlocking Director Network and corporate performance. On the contrary, there is a positive correlation between the network scale and corporate finance. Lastly, there is also a positive relation of centrality of network and corporate performance.The paper will analyze the influence path between director of network and corporate performance, and describe the influence from social capital of director of network on corporate performance. The result of the paper will also has significance on how to use the director network to boost the level of corporate performance.