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Do Board Interlocks affect Entry Mode selection?


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Category
Conference
Conference Name
Academy of Management (82nd Annual Meeting)
Conference From
05-Aug-2022
Conference To
09-Aug-2022
Conference Venue
Seattle, USA
  • Abstract

Drawing on an integrated agency-resource dependence perspective, we study the role of board interlocks in shaping the entry mode decision of emerging market firms from knowledge-intensive industries. We distinguish between board interlocks formed by a firm’s inside and independent directors. Using a propriety dataset of 450 foreign market entries by Indian firms belonging to knowledge-intensive industries, we find that firms are more likely to choose cross-border acquisitions over Greenfield ventures when connected to other cross-border acquirers through both inside and independent director interlocks, however the effect of inside director interlocks is stronger. Foreign institutional investors' shareholding weakens the effect of inside director interlocks but strengthens the effect of independent director interlocks. Firm’s own international experience negatively impacts the effect of independent director interlocks on the entry mode decision.

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