Are American Interlocking Directorates Associated with Brain Circulation and do They Translate into Higher Corporate Performance?

Abstract

This study explores interlocking directorates, with specific focus on those connections when a director sits as an inside director for an American corporation and an outside director for firm located outside of North America. The goal of this study is to explore the spatial relationship between the personal histories of directors and the headquarter's location of the corporate boards on which they sit. First, it was found that a geographical relationship in the interlocking network of American companies exists. Second, it was determined that domestic personal histories played a significant role as 96.5 percent of directors attended a university in the United States and 93.4 percent directors were born there. When North American universities and North American births were deleted from the sample, a geographical pattern also emerges for Asian firms. Finally, the study found that the lone region that consistently displayed greater firm performance where a director's personal history and the interlocked company were the same as Asia.

• interlocking directorates
• brain circulation
• corporate geography

Notes

1. A director can be an outside director for more than one corporation.