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The Incidence And Performance Effects Of Interlocking Directorates In Emerging Market Business Groups : Evidence From India

Author

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  • Bikram De

    (Indira Gandhi Institute of Development Research)

Abstract

The phenomenon of interlocking directorates is widespread among corporate across the world. This paper studies the structure and extent of interlocking directorates within Indian business groups and analyses the performance effects of such interlocks. It finds that large groups tend to have more interlocks and more heterogeneous the group is, lesser are the interlocks. Finance and trading companies are seen to have a higher intensity of interlocks and holding companies occupy important nodes in the directorial network. The paper also shows that directorial interlocks improve the performance of group-affiliated firms.

Suggested Citation

  • Bikram De, 2003. "The Incidence And Performance Effects Of Interlocking Directorates In Emerging Market Business Groups : Evidence From India," Microeconomics Working Papers 22390, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:microe:22390
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    File URL: http://www.eaber.org/node/22390
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    References listed on IDEAS

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    1. Tarun Khanna & Krishna Palepu, 1999. "Policy Shocks, Market Intermediaries, and Corporate Strategy: The Evolution of Business Groups in Chile and India," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 8(2), pages 271-310, June.
    2. Tarun Khanna & Krishna Palepu, 2000. "Is Group Affiliation Profitable in Emerging Markets? An Analysis of Diversified Indian Business Groups," Journal of Finance, American Finance Association, vol. 55(2), pages 867-891, April.
    3. Tarun Khanna & Krishna Palepu, 2000. "Emerging Market Business Groups, Foreign Intermediaries, and Corporate Governance," NBER Chapters, in: Concentrated Corporate Ownership, pages 265-294, National Bureau of Economic Research, Inc.
    4. Dooley, Peter C, 1969. "The Interlocking Directorate," American Economic Review, American Economic Association, vol. 59(3), pages 314-323, June.
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    Cited by:

    1. ROMMENS, An & CUYVERS, Ludo & DELOOF, Marc, 2007. "Interlocking directorates and business groups: Belgian evidence," Working Papers 2007023, University of Antwerp, Faculty of Business and Economics.
    2. Aylin Ataay, 2016. "Roles of Interlocking Directorates in an Emerging Country: Control and Coordination in Family Business Groups," Eurasian Journal of Business and Management, Eurasian Publications, vol. 4(2), pages 106-116.
    3. Bandyopadhyay, Arindam & Barua, Nandita Malini, 2016. "Factors determining capital structure and corporate performance in India: Studying the business cycle effects," The Quarterly Review of Economics and Finance, Elsevier, vol. 61(C), pages 160-172.

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    More about this item

    Keywords

    Interlocking directorates; board structure; corporate governance.;
    All these keywords.

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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