More than adopters: Competing influences in the interlocking directorate

Abstract

This study explores the competing influences of different types of board interlocks on diffusion of a strategic initiative among a population of firms. We examine a broad social network of interlocking directors in U.S. firms over a period of 17 years and consider the likelihood that these firms will adopt a strategy of expansion into China. Results show that ties to adopters that unsuccessfully implement this strategy have a nearly equal and opposing effect on the likelihood of adoption as do ties to those that successfully implement the strategy. Ties to those that do not implement the strategy also have a suppressive effect on the likelihood of adoption. Furthermore, we examine a firm's position in the core-periphery structure of the interlocking directorate, finding that ties to adopters closer to the network core positively affect the likelihood of adoption. We discuss the implications of our study for social network analysis, governance, and internationalization research. © 2011 INFORMS.