"Power Projection": A Study Of Independent-director-based Interlocking Networks Between China’s Listed Corporations

This article investigates into the interlocking network of China’s Listed Companiescaused by independent directors. The network developed along with theinstitutionalization process of the foundation of independent directors, and quicklyformed its own characteristics. I take a perspective of heterogeneity and distinguishedtwo kinds of networks: the “Political network” and the “Accounting network”. Then thisarticle tries to explain the mechanics which caused the structural differences betweenthe two networks, hoping to develop the idea of “the politics of markets”.The article has three main findings: First, after examining two competitivehypotheses, the “dominance of SOE” hypothesis and the “degree of marketization”hypothesis, the research found little evidence that supports these two hypotheses;Secondly, three opposing mechanisms are identified to explain the differences ofheterogeneous networks:1. Hierarchical relationship VS equal-leveled relationship;2.Industrial clustering VS industrial division;3. Administrative protection VShinterland-based reputation.; Thirdly, in discussing the meaning behind thesemechanisms, the article proposes the concept of “power projection” to show howpolitical constraints are reflected in the network relationship between companies, andthat market structure is not only the consequences of economic forces, but also theconsequence of social and political forces, which is one of the most important issues ineconomic sociology.