Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86269
Authors: 
Non, Mariëlle C.
Franses, Philip Hans
Year of Publication: 
2007
Series/Report no.: 
Tinbergen Institute Discussion Paper 07-034/2
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 101 large Dutch firms using a large and new panel database. We use five different performance measures, and for each performance measure we design three different panel data models, where we allow the effect of the number of interlocks to be linear, quadratic or square root, either with or without lags. Based on all results we conclude that current interlocks can have a negative effect on future firm performance. We show that this negative effect is jointly established by (1) interlocking directors being too busy and (2) by directors being members of a homogenous upper class group.
Subjects: 
interlocks
firm performance
JEL: 
C23
G34
J53
Z13
Document Type: 
Working Paper

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