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Interlocks and firm performance: The role of uncertainty in the directorate interlock‐performance relationship
Author(s) -
Martin Geoffrey,
Gözübüyük Remzi,
Becerra Manuel
Publication year - 2015
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.2216
Subject(s) - interlock , moderation , argument (complex analysis) , resource dependence theory , sample (material) , moderated mediation , industrial organization , mediation , business , computer science , microeconomics , economics , engineering , political science , biochemistry , chemistry , chromatography , machine learning , law , electrical engineering
We examine how uncertainty influences the performance effects of directorate interlocks. Our study offers a new perspective of directorate interlocks as mechanisms that enable firms to improve performance when confronted with greater uncertainty, suggesting that uncertainty positively moderates the interlock‐performance relationship. This contrasts with the view based on resource dependence theory suggesting networks reduce uncertainty and enhance firm performance, implying that uncertainty mediates the interlock effect upon performance. Using a sample of 3,745 firms across manufacturing industries in the United States during the period 2001–2009, we find support for the moderation argument and less convincing support for mediation, suggesting that firms may not form interlocks necessarily to reduce uncertainty. Instead, firms may create interlocks to enable adaptation and enhance performance when confronted by uncertainty . Copyright © 2013 John Wiley & Sons, Ltd.