A Comparative Study of the Effect of  Interlocking Directorates on Merger  Target Selection under Different Merger  and Acquisition Modes

Zhang, Qian

doi:10.4236/ajibm.2016.63023

Cited by 4 publications

(2 citation statements)

References 18 publications

(15 reference statements)

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“…In recent years, interlocking directorates has become a widespread phenomenon across the world. Research shows that around 72.13% of companies listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange have at least one joint member of the board of directors [21]. In Poland, the scope of interconnection through interlocking is definitely smaller.…”

Section: Interlocking Directorates In Acquisition Processesmentioning

confidence: 99%

Influence of Interlocking Directorates on Integration after the Acquisition of Warsaw Stock Exchange—Listed Companies

Stankiewicz-Mróz

2019

Sustainability

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Acquisition processes are aimed at achieving value based on synergistic effects. One of the most important obstacles in achieving value is the manner of conducting post-transaction integration—a risk area often ignored. This study assumes that a factor that may be important for the course of integration after the acquisition of enterprises may be the fact of personal connections through interlocking directorates between transaction partners of acquisitions. The research was carried out in two stages. The first was to identify the scope of connections by interlocking between WSE-listed companies participating in acquisition transactions. This stage was implemented using the social network analysis method (SNA) and covered 188 companies. In the second stage, research was conducted using semi-structured interview techniques with the CEOs of the acquiring companies. The aim of the study was to identify the relationship between personal relations and the course of post-transaction integration. The analysis focused primarily on two factors: the dynamics of integration activities and their centralization. The research covered 38 companies that were included in the sample in the first stage of the research (including 19 personally related companies and, for comparison, in 19 unrelated companies). Studies have shown that the fact of connecting through interlocking affects the post-transaction integration model in the analyzed group. The dynamically centralized model dominates in enterprises related by particular persons. Many integration activities are carried out in the first 100 days. The factor affecting the implemented integration model is the durability of connections between participants before and after the transaction is conducted and the position in the network of connections determined by such sociometric measures as the centrality of proximity and own vector. Enterprises connected with long-term relationships usually demonstrate high dynamics of integration activities, which are conducted by joint teams whose group employees represent each of the merging enterprises. In addition, the CEOs surveyed from this group of companies declare having an integration plan with different levels of detail in each case.

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Section: Interlocking Directorates In Acquisition Processesmentioning

confidence: 99%

Influence of Interlocking Directorates on Integration after the Acquisition of Warsaw Stock Exchange—Listed Companies

Stankiewicz-Mróz

2019

Sustainability

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“…Secondly, there is a large body of literature on the network types of governance used by the Chinese government. A part of this literature are studies of horizontal directorate interlocks between Chinese firms (Au, Peng, & Wang, 2000; Li, Tian, & Yan, 2013; Lin, Peng, Yang, & Sun, 2009; Luo, 2003; Yang & Cai, 2011; Zhang, 2016). However, very little research exists on the use of vertical interlocks within business groups (see review below), which we in this article suggest is one solution to the coordination or governance problems mentioned above.…”

Section: Introductionmentioning

confidence: 99%

Multi-Level State Capitalism: Chinese State-Owned Buisness Groups

et al. 2018

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We argue that vertical interlocks in Chinese state-owned business groups are important mechanisms for coordination and information exchange between the apex firm and affiliated firms, and that they are also mechanisms for government owners of the business groups to exercise control. By combining resource dependence theory with elements from transaction cost economics and agency theory, we propose that the need for interlocks increases the higher the level of government ownership. The central government is therefore more likely to use vertical interlocks than the provincial governments, which again are more likely to use vertical interlocks than the municipal governments. We develop three hypotheses based on these arguments. A regression analysis of a hand-collected data set finds strong support for our hypotheses. Our results shed light on coordination and governance issues within the state-owned sector in China and on an important means for mitigating these issues used by the government owners and firms affiliated with state-owned groups.

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