How Does Interlocking Directorates Network Affect Corporate Performance?

The phenomenon of interlocking directorates exists widely in Chinese companies.A director is called interlocking directorate if he or she serves in one company and holds directorship in at least one other company.The relationship network composed of interlocking directorate is the interlocking directorates networks.It is an important part of the company's social relationship network and has an important impact on the company's operations,corporate governance,and company performance.Therefore,this dissertation focuses on the interlocking directorates networks formed between listed companies in China,and explores its impact on corporate performance.Firstly,this dissertation reviews the relevant literature on interlocking directorates networks and corporate performance,and after summarizing the causes of interlocking directorates networks and its mechanism on corporate performance,it analyzes and compares the differences in previous studies,by analyzing and comparing the differences of previous studies,it is found that starting from different dimensions and different mechanisms,the interlocking directorates networks will have positive,negative and no impact on corporate performance,and the impact direction is uncertain.In view of this,the questions studied in this dissertation are raised,That is,how does interlocking directorates networks affect corporate performance? And how does interlocking directorates networks with different attributes affect corporate performance? Considering the heterogeneity of enterprises such as the property rights,geographical location,and scale of enterprises,will directorates networks have different effects on corporate performance? Next,the research design and empirical analysis are performed.This dissertation uses the data from Shanghai and Shenzhen listed companies in CSMAR database from 2007 to 2017 as a research sample,and then the social network analysis method is used to calculate degree centrality and betweenness centrality of interlocking directorates networks.Finally,controlling the yearly and industrial effects,the panel data fixed effect model regression is used for full sample regression and group regression.The empirical analysis shows that there is a significant positive correlation between company performance and interlocking directorates networks.Both the independent directors networks and the non-independent directors networks have a significant positive impact on corporate performance.In terms of different property rights,whether it is a state-owned enterprise or a non-state-owned enterprise,interlocking directorates networks has a significant positive impact on it.For companies in the eastern,central and western regions,there is also a significant positive correlation between interlocking directorates networks and their performance.For companies of different sizes,interlocking directorates networks has a significant positive impact on corporate performance.And based on the seemingly unrelated regression,it is found that this effect does not differ significantly due to the heterogeneity of enterprises.This dissertation further enriches the research on interlocking directorate and corporate governance,examines the heterogeneity of companies and different director attributes,and explores the impact of interlocking directorates networks on corporate performance from a relatively new perspective.It has profound significance.In addition,this study can provide a kind of reference for the company in the setting of the board of directors and corporate governance to help companies achieve business goals and improve business performance,and also provide a reference for the government in the supervision of listed companies.