Title
Interlocking directorates and business groups: Belgian evidence Interlocking directorates and business groups: Belgian evidence
Author
Faculty/Department
Faculty of Applied Economics
Publication type
report
Publication
Antwerp :UA, [*]
Source (series)
Research paper / UA, Faculty of Applied Economics , 2007:23
Volume/pages
39 p.,
Carrier
E
Target language
English (eng)
Affiliation
University of Antwerp
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.
Full text (open access)
https://repository.uantwerpen.be/docman/irua/fb7006/1b3d7f15.pdf
Handle