Interlocking Directorates and Firm Performance: Evidence from French Companies

Posted: 15 Apr 2010

See all articles by Sana Elouaer Mrizak

Sana Elouaer Mrizak

Faculté de Droit et des Sciences Economiques et Politiques de Sousse

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Date Written: March 1, 2009

Abstract

An interlock between two firms occurs if the firms share one or more directors in their boards of directors. We explore the effect of interlocks on firm performance for a sample of 250 French companies using a large and new panel database. We use two different performance measures (Return On Assets and Tobin's Q).

Based on all findings we conclude that there is a significant association between network position and performance. Based on the way it is linked to other firms in the network, a firm's position in a network has been shown to have effect on the performance of a firm. In other words, we conclude that the firm's performance is a function of the position of a company to others in the whole network. The results suggest that the location of firms in these networks is more important than simply the number of ties.

Keywords: firm performance, interlocks, network position

JEL Classification: C23, J53, G32, G34, Z13

Suggested Citation

Elouaer Mrizak, Sana, Interlocking Directorates and Firm Performance: Evidence from French Companies (March 1, 2009). Available at SSRN: https://ssrn.com/abstract=1589663

Sana Elouaer Mrizak (Contact Author)

Faculté de Droit et des Sciences Economiques et Politiques de Sousse ( email )

Cité Erriadh BP 159
4023
Sousse, Sousse 4023
Tunisia

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