It is useful to consider the interlocks according to the type of board member (executive or non-executive) who posseses them? Their effect on firm performance

  1. Leticia Pérez-Calero Sánchez
  2. Carmen Barroso-Castro
Aldizkaria:
Revista europea de dirección y economía de la empresa

ISSN: 1019-6838

Argitalpen urtea: 2015

Alea: 24

Zenbakia: 3

Orrialdeak: 130-137

Mota: Artikulua

DOI: 10.1016/J.REDEE.2015.04.001 DIALNET GOOGLE SCHOLAR lock_openDialnet editor

Beste argitalpen batzuk: Revista europea de dirección y economía de la empresa

Laburpena

Taking the assumptions of the resource dependency theory as our starting point, the main objective of this investigation is to gain an understanding of how and in what way board members who serve on multiple boards (interlocks) can affect a firm's profitability, and whether it is useful to consider the derivation of these interlocks according to the type of board member (executive or non-executive) who possesses them. Using dynamic panel data analysis (GMM) and a sample of 88 firms quoted on the Spanish Continuous Market for the period 2005–2008, our results confirm the existence of a curvilinear (inverted-U) relation between interlocks and firm performance. The results demonstrate that this relation is only significant if we include the total number of external ties rather than just the number of links generated by non-executive directors. We can also confirm that the degree of familiarity and shared knowledge between board members (measured by average board tenure) affects this relationship.

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