Horizontal and Vertical Firm Networks, Corporate Performance and Product Market Competition

MPRA Paper No. 63413

30 Pages Posted: 7 Apr 2015

See all articles by Oliver Bischoff

Oliver Bischoff

Frankfurt University of Applied Sciences; Monopolies Commission; University of Hamburg

Achim Buchwald

Monopolies Commission; Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE)

Date Written: April 1, 2015

Abstract

This paper sheds new light on the assessment of firm networks via multiple directorships in terms of corporate firm performance. Using a large sample of European listed firms in the period from 2003 to 2011 and system GMM we find a significant compensation effect on corporate firm performance for the initial negative effect of horizontal multiple directorships by product market competition. In markets with effective competition, horizontal multiple directorships turn out to be an efficient mechanism to increase firm performance and thus assure competitive advantages. By contrast, linkages between up- and downstream firms have no significant influence on financial performance, irrespective of the level of competition intensity.

Keywords: Horizontal and Vertical Firm Networks, Multiple Directorships, Corporate Governance, Product Market Competition, Dynamic Panel

JEL Classification: C23, G32, G34, L14, L25, L40

Suggested Citation

Bischoff, Oliver and Buchwald, Achim, Horizontal and Vertical Firm Networks, Corporate Performance and Product Market Competition (April 1, 2015). MPRA Paper No. 63413, Available at SSRN: https://ssrn.com/abstract=2590268 or http://dx.doi.org/10.2139/ssrn.2590268

Oliver Bischoff (Contact Author)

Frankfurt University of Applied Sciences ( email )

Nibelungenplatz 1
Frankfurt / Main, 60318
Germany

HOME PAGE: http://https://www.frankfurt-university.de/english/faculties/business-and-law.html

Monopolies Commission ( email )

Heilsbachstraße 16
Bonn, 53123
Germany

HOME PAGE: http://www.monopolkommission.de/index.php/en/

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

HOME PAGE: http://www.uni-hamburg.de/economicpolicy/

Achim Buchwald

Monopolies Commission ( email )

Heilsbachstr. 16
Bonn, 53123
Germany

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE)

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany

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