The role of board interlocks in increasing the use of wood in construction

Abstract

This paper studies the existence of board interlocks between wood-based firms in the construction supply chain and firms in other industries and their role in enabling increased use of wood in construction. Despite recent technological developments in wood-based construction, it is still a niche within the construction market. The literature highlights two main barriers to wood-based construction: (1) lack of material expertise and (2) lack of coordination and collaboration across the supply chain. Interfirm governance structures, such as board interlocks, may constitute a path towards innovation in construction by establishing strategic partnerships. By combining resource dependence theory and dynamic capabilities, we formulate expected findings and analyse these through social network analysis and interviews with board of director's members of wood-based firms in Norway. The dataset consists of 549,449 firms. We find that most wood-based firms have board interlocks with other firms. Furthermore, these other firms are spread across industries, but most belong to industries within the construction supply chain. Additionally, the role of these board interlocks is not to secure access to material resources but to access immaterial resources, such as knowledge, expertise and skill, which contribute to the firms' dynamic capabilities and consequently their competitive advantage.