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Title
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Interlocking directorates and business groups: Belgian evidence
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Author
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Abstract
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| 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. |
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Language
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English
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Source (series)
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Research paper / UA, Faculty of Applied Economics , 2007:23
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Publication
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Antwerp
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UA
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2007
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Volume/pages
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39 p.
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Full text (open access)
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