Inter-firm Networks: Coordination Through Board and Department Interlocks

335 Pages·2023·9.939 MB·English

by  Lucio Biggiero, Robert Magnuszewski

Relational Economics and Organization Governance
Lucio Biggiero
Robert Magnuszewski
Inter-firm
Networks
Coordination Through Board and
Department Interlocks
Relational Economics and Organization
Governance
Series Editors
Lucio Biggiero , University of L’Aquila, L’Aquila, Italy
Derick de Jongh, University of Pretoria, Pretoria, South Africa
Birger P. Priddat, Witten/Herdecke University, Witten, Germany
Josef Wieland, Zeppelin University, Friedrichshafen, Germany
Adrian Zicari, ESSEC Business School, Cergy-Pontoise, France
This interdisciplinary book series examines recent developments concerning the
“relational view” in economics. While the relational research perspective primarily
has roots in philosophy, sociology and economic geography, this series offers contri-
butions to the relational view from such diverse fields as institutional and organi-
sational economics, management, organisational theory, and mathematics. Focusing
on a relational approach to contracts and governance, leadership, rents, global coop-
eration, intersectoral cooperation and civil society, the series welcomes theoret-
ical and empirical research on relational structures in market theory, institutional
and organisational economics, the resource-based view of the firm, organisational
studies, behavioural economics and economic sociology. Within this range of fields,
researchers are invited to contribute to the further development of a relational view
in economics.
·
Lucio Biggiero Robert Magnuszewski
Inter-firm Networks
Coordination Through Board and Department
Interlocks
Lucio Biggiero Robert Magnuszewski
University of L’Aquila University of L’Aquila
L’Aquila, Italy L’Aquila, Italy
ISSN 2662-9852 ISSN 2662-9860 (electronic)
Relational Economics and Organization Governance
ISBN 978-3-031-17388-2 ISBN 978-3-031-17389-9 (eBook)
https://doi.org/10.1007/978-3-031-17389-9
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature
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Contents
1 Introduction ................................................... 1
2 A Knowledge-Based View of Inter-Firm Interlock Coordination .... 7
2.1 A Knowledge-Based View of Inter-Firm Networks ............. 7
2.2 Inter-Firm Knowledge Networks ............................. 10
2.3 Board Interlocks from the Knowledge-Based View ............. 13
2.4 Social Network Analysis ................................... 16
2.5 Department Interlocks ..................................... 17
2.6 Hybrid Manager-Director Coordination ....................... 18
2.7 The Effects of Board Interlocks on Firm Performance .......... 19
2.8 The Antitrust Literature and the View from Standard
Economics ............................................... 22
2.9 Summary ................................................ 24
References ..................................................... 25
3 Overview on the EU28 Aerospace Industry Network and Its
Neighbors ..................................................... 33
3.1 A Brief Overview of the Industry ............................ 33
3.2 A Statistical Description .................................... 36
3.3 Basic Structural Aspects .................................... 42
3.4 An Integrated View of the Main Analytical
Aggregates—EASIN, EASINT, Neighbors and EASIN +
NEIGH .................................................. 56
3.5 Summary ................................................ 58
References ..................................................... 59
4 Network Analysis of the ALL (Merged) Network .................. 63
4.1 Network Outline .......................................... 63
4.2 Correlation Analysis ....................................... 68
4.3 Components and Cliques ................................... 72
4.4 Inter-sectoral Network ..................................... 79
4.5 Inter-country Network ..................................... 84
v
vi Contents
4.6 Cluster Analysis ........................................... 94
4.7 Bridging Companies as Key-Players ......................... 106
4.8 The Different Composition of the Main Component ............ 112
4.9 Heavy-Tail Scale-Free Distribution Analysis .................. 113
4.10 Summary ................................................ 117
References ..................................................... 120
5 Inter-Departmental Coordination Through Shared Managers ...... 123
5.1 Network Outline and Statistical Analysis ..................... 123
5.2 Correlation Analysis ....................................... 126
5.3 Network Analysis ......................................... 131
5.4 Inter-Sectoral Network ..................................... 135
5.5 Inter-Country Network ..................................... 137
5.6 Cluster Analysis ........................................... 146
5.7 Cliques Analysis .......................................... 158
5.8 Bridging Companies as Key-Players ......................... 159
5.9 Heavy-Tail Scale-Free Analysis ............................. 161
5.10 Assortativity .............................................. 162
5.11 Summary ................................................ 162
References ..................................................... 164
6 Inter-Board Coordination Through Shared Directors .............. 165
6.1 Network Outline and Statistical Analysis ..................... 165
6.2 Correlation Analysis ....................................... 168
6.3 Network Analysis ......................................... 173
6.4 Inter-Sectoral Network ..................................... 177
6.5 Inter-Country Network ..................................... 179
6.6 Cluster Analysis ........................................... 190
6.7 Cliques Analysis .......................................... 201
6.8 Bridging Companies as Key-Players ......................... 203
6.9 Heavy-Tail Scale-Free Analysis ............................. 204
6.10 Assortativity .............................................. 206
6.11 Summary ................................................ 206
7 Asymmetric Knowledge Coordination Through
the Manager-Director Hybrid Role ............................... 209
7.1 Network Outline and Statistical Analysis ..................... 209
7.2 Correlation Analysis ....................................... 211
7.3 Network Analysis ......................................... 215
7.4 Inter-sectoral Network ..................................... 218
7.5 Inter-country Network ..................................... 225
7.6 Cluster Analysis ........................................... 234
7.7 Bridging Companies as Key-Players ......................... 245
7.8 Heavy-Tail Scale-Free Analysis ............................. 246
7.9 Assortativity .............................................. 248
7.10 Summary ................................................ 250
References ..................................................... 252
Contents vii
8 Comparing the Three Coordination Forms and Hypotheses
Testing ........................................................ 253
8.1 Bridging Companies and their Coordination Propensity ......... 253
8.2 Assortativity .............................................. 254
8.3 Topological Similarity between Companies within Networks .... 257
8.4 Topological Similarity between Networks ..................... 259
8.5 Does Interlock Coordination Enhance a Better Economic
Performance? ............................................. 262
8.6 Could the Connectivity-Performance Relation Be Nonlinear? .... 264
8.7 Proximity and Interlock Coordination ........................ 267
8.8 Bank Centrality: Do Banks Play a Pivotal Role in Interlock
Networks? ................................................ 274
8.9 Do Continental EU Countries Have Stronger Connection
with the Financial Sector? .................................. 279
8.10 Is There an Association Between a Company’s Size
and Interlock Coordination Propensity? ....................... 281
8.11 Is Companies’ Interlocking Propensity
Country/Size-Specific? ..................................... 284
8.12 Summary ................................................ 286
References ..................................................... 289
9 Conclusions .................................................... 293
References ..................................................... 301
Methodological Appendix .......................................... 303
Bibliography ...................................................... 323
Index ............................................................. 327
Abbreviations
General
AKE Asymmetric Knowledge Exchange
ACT Agency Cost Theory
BINT Board Interlocks
CONEU Continental EU
CPAH Centrality/Performance Advantage Hypothesis
DINT Department Interlocks
HINT Hybrid Interlocks
HTSF Heavy-Tail Scale-Free
LPH Low-Performance Hypothesis
MOS Management and Organization Sciences
MPH Medium Proximity Hypothesis
OPH Optimal Proximity Hypothesis
PCR People Coordination Relationship
PFH Pivotal Finance Hypothesis
PPH Proportional Proximity Hypothesis
RDT Resource Dependence Theory
SPCH Size Proportional Connectivity Hypothesis
TCT Transaction Cost Theory
Economic-Financial
CF Cash flow
EC Equity capital
EM Number of employees
PM Profit margin
ROCE Return on capital employed
ROE Return on equity
ix
x Abbreviations
TASS Total assets
TURN Turnover
Network
ALL All types of links together in a single network
D2D Director-to-Director
MC Main Component
EASIN European Aerospace Industry Network
E+N/EASIN + NEIGH EASIN + Neighbors
EASINT EASIN Integrated
M2D Manager-to-Director
M2M Manager-to-Manager
Network Indexes (Where Applicable Weighted Versions
Substitute the First “B” with “W”)
BBc Binary Betweenness centrality
BICc Binary In-Closeness centrality
BIDc Binary In-Degree centrality
BIEc Binary In-Eigenvector centrality
BIKc Binary In-Katz centrality
BOCc Binary Out-Closeness centrality
BODc Binary Out-Degree centrality
BOEc Binary Out-Eigenvector centrality
BOKc Binary Out-Katz centrality
BRc Bridging centrality (only binary)
BTDc Binary Total Degree centrality
LORC Local Out-Reaching Centrality
LIRC Local In-Reaching Centrality
RWBc Random Walk/Random Walk Betweenness centrality
ADc Average Degree Centrality
Apl Average path length
Bc_CE Betweenness CEntralization
BOKc Binary Out-Katz centrality
Eig_CE Eigenvector CEntralization (which can be binary or weighted)
GCL Global Clustering Coefficient
GORC Centralization degree of hierarchical degree according to the Out-
Reaching Centrality