Board interlocks and imitation in corporate acquisitions: A literature review and avenues for future research

Abstract

Interlocking directorates create the conditions for social embeddedness and represent a key driver of the diffusion of strategies and practices (Okhmatovskiy & David, 2012). Among the multiple focuses of analysis, board interlocks have been regarded as a source of inter-organizational imitation in the context of corporate acquisitions (Xia, Ma, Tong, & Li, 2018; de Sousa Barros, Cárdenas, & Mendes-Da-Silva, 2021). Imitation indeed has been acknowledged as one of the primary implications of interlocking directorates (Shropshire, 2010). This study, therefore, offers an in-depth summary and discussion of how interlocks of business elites influence corporate acquisitions. Multiple contributions are provided. First, the paper develops a thematic analysis in which multiple research focuses are identified, namely acquisition activity and emphasis, acquisition timing in mergers and acquisitions (M&A) waves, acquisition process, and acquisition premium. Second, it elaborates on a number of potential avenues for future research. Specifically, it identifies three main lines of inquiry related to the imitation scope, performance at both firm- and industry-level, and potential theoretical cross-fertilizations. Moreover, methodological considerations are discussed especially in terms of operationalization choices and their implications. To the best of the author’s knowledge, this paper represents the first attempt to review the literature on the interlocks-acquisition field.

Shortening the distance between firms for M&A: the influence of small-world network structure on mergers and acquisitions

“…Second, it contributes to the research area of interlocking directorates by identifying the corporate network features – local clustering, average distance, main component – that influence organizational decisions. Third, because research on determinants of M&A has mostly concentrated on advanced economies (see Galavotti, 2021 for a review), this study adds to the literature on M&A by analyzing national and international M&A performed by firms headquartered in an emerging economy. Fourth, it contributes methodologically by including country-level variables in the assessment of institutional, governmental, legal, or macroeconomic effects on international M&A.…”