TY - GEN
T1 - Interlocking directorates and profitability
T2 - 2012 IEEE/ACM International Conference on Advances in Social Networks Analysis and Mining, ASONAM 2012
AU - Chua, Alton Y.K.
AU - Balkunje, Radhika Shenoy
PY - 2012
Y1 - 2012
N2 - Given the conflicting results from past research, this paper uses social network analysis (SNA) to empirically determine the relationship between interlocking directorates and corporate profitability. Specifically, it seeks to address two research questions: (1) what relationship exists between the number of director interlocks and companies' profitability? (2) what relationship exists between power within the network of interlocking directorates and companies' profitability? The dataset was drawn from 2010 Fortune 500 companies. Regression models were developed to address the two research questions. To mitigate the effects of confounding factors, three control variables, namely, size, age and sector of the companies were used. Results suggest that both interlocks and power asserted a positive linear relationship with companies' profitability. However, the control variables did not seem to influence these relationships. Moreover, prediction of companies' profitability was found to be a complex undertaking. In conclusion, this paper acknowledges a few limitations and offers suggestions for future research.
AB - Given the conflicting results from past research, this paper uses social network analysis (SNA) to empirically determine the relationship between interlocking directorates and corporate profitability. Specifically, it seeks to address two research questions: (1) what relationship exists between the number of director interlocks and companies' profitability? (2) what relationship exists between power within the network of interlocking directorates and companies' profitability? The dataset was drawn from 2010 Fortune 500 companies. Regression models were developed to address the two research questions. To mitigate the effects of confounding factors, three control variables, namely, size, age and sector of the companies were used. Results suggest that both interlocks and power asserted a positive linear relationship with companies' profitability. However, the control variables did not seem to influence these relationships. Moreover, prediction of companies' profitability was found to be a complex undertaking. In conclusion, this paper acknowledges a few limitations and offers suggestions for future research.
KW - Director interlocks
KW - Fortune 500 companies
KW - Power
KW - Profitability
KW - Social network analysis
UR - http://www.scopus.com/inward/record.url?scp=84874283082&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84874283082&partnerID=8YFLogxK
U2 - 10.1109/ASONAM.2012.190
DO - 10.1109/ASONAM.2012.190
M3 - Conference contribution
AN - SCOPUS:84874283082
SN - 9780769547992
T3 - Proceedings of the 2012 IEEE/ACM International Conference on Advances in Social Networks Analysis and Mining, ASONAM 2012
SP - 1105
EP - 1110
BT - Proceedings of the 2012 IEEE/ACM International Conference on Advances in Social Networks Analysis and Mining, ASONAM 2012
Y2 - 26 August 2012 through 29 August 2012
ER -