A Study On The Effect Of Interlocking Directorship And Product Market Competition On The Corporate Performance

With the change of the market environment,the orientation and behavior of the enterprise have changed fundamentally.The enterprise has entered the era of network cooperation.As a kind of organizational phenomenon prevalent in the Chinese commercial network,the interlocking directorship has gradually entered the field of vision of the researchers.A interlocking director is a director who serves on a board of directors of two or more companies at the same time.The network is formed by a interlocking director who is linked to another interlock director.Nowadays,scholars combine the network of chain directors with the frontier problems such as corporate governance and social capital to explore the influence of interlocking directorship network on corporate performance,and become the mainstream research direction in academia.However,due to differences in research methods and perspectives,the current research on the chain of directors of the conclusions of the study is still a lot of controversy.Based on the theory of resource dependence,collusion theory,reciprocity theory,hierarchical leadership theory and supervision and control theory,this paper takes A-share listed companies with Jiangsu-Zhejiang-Shanghai interlocking directors as the research samples from 2013 to 2015,introduces the product market competition as a moderator,using literature analysis,social network analysis and empirical research methods to explore the following questions:(1)What is the influence of interlocking director's network centrality on corporate performance? Does it have a positive impact or a negative impact?(2)Does the product market competition play a regulatory role in the impact of interlocking directors on firm performance?On the basis of reading and combing the literature and theoretical analysis,this study used Excel to process the data and used PAJEK to calculate the network centrality.Finally,descriptive analysis,correlation analysis and multiple linear regression were carried out with STATA13.After theoretical analysis and empirical test,the following two conclusions are obtained:(1)The higher the centrality of the network,the more resources and information the firm can obtain.Measured variables of network centrality as degree,betweenness,closeness,eigenvector,has positive effects on firm performance respectively.(2)The degree of competition plays a negative role in the impact of the network of interlocking directors on firm performance.When the market competition is intense,the manager in order to reduce the liquidation risk,will strive to improve performance.In other words,the advantages of interlocking directors in the center of the network have limited impact on corporate performance.Product market competition and network location is an alternative relationship.This paper introduces the product market competition as a moderator,forming a useful complement to the study of the interlocking director network,which is conducive to a deep understanding of the relationship between the interlocking directors and the performance of the company.Based on the empirical results,the paper puts forward the following policy recommendations:(1)Optimize the position of enterprises in the network.(2)Establish linkages between enterprises should focus on the ability and reputation of interlocking directors.(3)Standardize management of interlocking directors.(4)Strengthen the industry effective competition.