Interlocking directorates and business groups: Belgian evidence
Abstract: We investigate the determinants of interlocking directorates and their impact on company performance for a Belgian sample of 286 companies affiliated with a business group and 2,136 stand-alone companies. Most of these companies are not listed. We find that companies belonging to a group have much more interlocking directorates than stand-alone companies. Group companies tend to be strongly interlocked with other group members, including parent companies, and they have more intra-group interlocks when they are located at a higher hierarchical group level. Group companies have more ve... Mehr ...
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Dokumenttyp: | report |
Erscheinungsdatum: | 2007 |
Sprache: | Englisch |
Permalink: | https://search.fid-benelux.de/Record/base-28490977 |
Datenquelle: | BASE; Originalkatalog |
Powered By: | BASE |
Link(s) : | https://hdl.handle.net/10067/663580151162165141 |
Abstract: We investigate the determinants of interlocking directorates and their impact on company performance for a Belgian sample of 286 companies affiliated with a business group and 2,136 stand-alone companies. Most of these companies are not listed. We find that companies belonging to a group have much more interlocking directorates than stand-alone companies. Group companies tend to be strongly interlocked with other group members, including parent companies, and they have more intra-group interlocks when they are located at a higher hierarchical group level. Group companies have more vertical interlocks when they are involved in an internal capital market and when they are affiliated with a diversified business group. We also find that while interlocking directorates are negatively related to the profitability of stand-alone companies, they do not affect the profitability of group companies. This suggests that directors in Belgian business groups are not too busy, and that intra-group interlocks are not facilitators of expropriation by controlling shareholders.