The Impact of Interlocking Directorates on Firm Value: Empirical Evidence from KOSDAQ companies in Korea

• 발행기관: People & Global Business Association
• 저자명: Jeong Hwan Park
• 간행물 정보: 『Global Business and Finance Review』Vol.30 No.1, 100~115쪽, 전체 16쪽
• 주제분류: 경제경영 > 경영학
• 파일형태: PDF
• 발행일자: 2025.01.30

국문 초록

Purpose: This study aims to analyze the impact of interlocking directorates on firm value, with a focus on KOSDAQ- listed companies. Specifically, it seeks to determine how interlocking directorates of inside and outside directors differentially affect firm value. Design/methodology/approach: Interlocking directorates are defined as situations where a single director serves on the boards of two or more companies. A regression analysis was conducted using a dataset of 6,436 firm-year observations from 2018 to 2022. To enhance the reliability of the results, the study distinguishes between inside and outside directors and enhances the analysis by employing a panel approach. Ultimately, a balanced panel was constructed to empirically analyze the impact of interlocking directorates on firm value. Findings: The findings indicate that an increase in interlocking directorates of inside directors is significantly asso-ciated with a decrease in firm value, while an increase in interlocking directorates of outside directors leads to a significant increase in firm value. These results suggest that the impact of interlocking directorates may vary depending on the characteristics of the directors. Consistent results were observed through a balanced panel analysis. However, in the case of interlocks with KOSPI-listed firms, only inside directors’ interlocks were found to have a significant effect on firm value. Research limitations/implications: This study focuses solely on interlocking directorates and does not consider other types of personal networks, such as regional or educational ties. Additionally, it faced limitations in securing a sufficient sample size for interlocking directorates with KOSPI-listed firms for analysis. Originality/value: This study provides critical empirical evidence on the effects of interlocking directorates in KOSDAQ-listed firms. It adds to existing research on interlocking directorates in the KOSPI market by demonstrat-ing that similar effects are observed in the KOSDAQ market, offering valuable insights for the decision-making processes of KOSDAQ companies and their stakeholders.

목차

Ⅰ. Introduction

Ⅱ. Literature Reviews and Hypothesis

Ⅲ. Study Design and Sample Selection

Ⅳ. Result of the Empirical Analysis

Ⅴ. Conclusion

Funding Statement

Conflicts of Interest

Author Contributions

References

키워드

Interlocking Directorate Board Interlock Multiple Directorship Firm Value