The Impact Of Director Network On Firms’ Imports And Exports Trade

At present,board network has gradually become a common phenomenon in the economic activities of firms.Since the establishment of the independent director system in 2001,the scale of China’s director network has been expanding day by day.At the same time,China is in the key stage of "transforming the development mode,optimizing the economic structure and transforming the driving force of growth".The continuous decline of the demographic dividend,the increasingly prominent constraints on resources and environment,and the approaching of the upper limit of the environmental carrying capacity have weakened the comparative advantage of China’s export trade,but new competitive advantages have not yet taken shape.What’s more,facing a series of trade friction problems caused by the huge trade surplus accumulated in China’s export trade,China will actively expand imports as an important strategy for expanding opening up and balancing the development of foreign trade in the new era.Under this background,how to give full play to the key role of the social relationship network of management in optimizing the allocation of resources among enterprises is a problem that needs to be paid attention to in the new period to strengthen the competitive advantage of enterprises in foreign trade,actively expand imports and realize the high-quality development of economy.However,the existing research on board network lacks systematic analysis of the structural characteristics of board network and the influencing factors of its formation.The literature on the economic effects of director network mainly analyzes its impact on firm investment and financing,M&A,innovation,firm value and operating performance,social responsibility and executive compensation,and few literatures pay attention to the impact of board network on firm import and export performance.Based on the above background and complex network theory,this paper tries to integrate the governance theory of inter-firm organizational relationship and the heterogeneous firm trade theory,analyzes the characteristics of board network structure and board influence on the import and export performance of enterprises,and tries to solve the following problems: How is the distribution of board network in China? What are the characteristics? What are the influencing factors and dynamic mechanisms that form this characteristic? As an effective way to extend the capabilities of firms,whether and how does board network affect the upgrading of firm export products? Do and how do board networks affect firm imports? Does board network induce firm imports to affect other firm performance? In view of the above problems,this paper has carried on the thorough analysis and obtains the conclusion as follows:Firstly,this paper constructs the board network of A-share listed companies during 2000-2018,systematically analyzes the overall pattern and local characteristics of the board network from the macro-whole,medium-community and micro-dimension,and empirically tests the factors affecting the formation and evolution of the board network from the perspective of endogenous structure effect,node attribute effect and network embeddedness effect by using exponential random graph models(ERGM)based on the perspective of relationship.The results show that the size of the board network is increasing,and the connectivity is improving constantly.The board network is characterized by small-world network,degree assortativity and randomization.The board network in Beijing,Shanghai,Shenzhen and other cities,Guangdong,Zhejiang,Jiangsu and other provinces,as well as the eastern region,is more intensive.The formation and evolution of board network structure are affected by the endogenous structure effects such as clustering effect,transitivity and structural embeddedness.Firm-pairs which are close in location,belong to the same industry,have similar productivity,or have higher similarity of marketization level and market segmentation in the provinces where the firms are located are more likely to establish board network relation.Firms with different size,age and capital intensity are more likely to format interlocking directorship.The older the firm age is and the higher the economic uncertainty of the province where the firm is located,the more likely it is that the firms will establish interlocking directorship.The firms that is in neighboring provinces or cities,the provinces or cities where the firms are located share a common dialect,have higher trust and connected the high-speed rail are more likely to establish board network relationship.More,firms with the same equity nature are more likely to establish interlocking directorships,while state-owned enterprises are more likely to establish interlocking directorships with others.Secondly,under the background that product upgrading has become a new advantage to accelerate the cultivation of export competition and realize the transformation from a big trading country to a powerful trading country,this paper systematically investigates the influence of board network on upgrading of firm export products based on the matching data of China Listed Company Database,data from Chinese Customs Trade Statistics and CEPII-BACI during 2000-2015.The result shows that board network plays a significant role in promoting the upgrading of firms’ export products,which remains robust after changing the measurement of key variable,considering endogenous problem and using the difference-in-differences technique.The result of heterogeneity tests show that board network plays a stronger role in promoting upgrading of firms’ export products in regions with higher market segmentation and state-owned firms.Mechanism tests find that the board network promotes the upgrading of firms’ export products by alleviating financing constraints,enhancing firm’s innovation ability and improving management efficiency.The findings of this paper provide a new perspective for deepening the understanding of the relationship between corporate governance and international trade,and have policy implications for strengthening firms’ competitive advantage of foreign trade in the new era.Finally,under the background that actively expanding imports has become an important strategy for China to expand opening up and balance the development of foreign trade in the new era,this paper analyzes the influence of board network on firms’ imports and its mechanism using the difference-in difference model.The results show that the board network has a significant effect on promoting the import value and product quality,and this conclusion is still robust after replacing the main variables,overcoming the sample selection bias and considering the endogenous problem.The influence of board network on the import value and product quality is heterogeneous,and it is stronger in the regions with lower financial development level,higher economic policy uncertainty and central and western regions,as well as private and general trading firms.The influence mechanism test shows that the board network alleviates the financing constraints and information problems of firms,and then promotes the import value and product quality of firms.Based on the conclusions,the policy implications are as follows:(1)firms should pay attention to the construction and governance of network relationship with firms,and establish strategic thinking of ecological network development.(2)The government should correctly guide firms to build diversified network cooperation platforms,actively help improve the cooperation environment among enterprises,and actively build more cooperation platforms to promote the establishment of extensive cooperation alliances among enterprises.At the same time,we should accelerate the construction of formal system and market-oriented mechanism.