To What Extent Do Board Interlocks Matter for New Venture Growth and When Do They Matter More?

TO WHAT EXTENT DO BOARD INTERLOCKS MATTER FOR NEW VENTURE GROWTH AND WHEN DO THEY MATTER MORE? Tatevik Harutyunyan PhD Research Scholar (2017-2021) NHH Norwegian School of Economics Department of Strategy and Management tatevik.harutyunyan@nhh.no The extant research addresses different aspects of the role of boards in new ventures (Li, Terjesen, & Umans, 2018). Board interlocks, instead, are understudied in the entrepreneurial setting (Lamb & Roundy, 2016). These, together with the inconsistency of findings on the relationship between board interlocks and firm performance ? one of the most researched relationships in interlock literature (Lamb & Roundy, 2016) ? triggered my interest towards the role of board interlocks in new venture growth. Therefore, the study investigates the extent to which and under which conditions board interlocks and the structural dimensions of board networks are related to new venture growth. On top of boards’ resource provision role shown to be of primary importance for new ventures (Garg & Furr, 2017), board interlocks bear the potential to provide timely resources embedded and derivable from board networks, including unique knowledge and information circulating only among/through board directors. Moreover, there are reputational outcomes of the membership in ? inner circles? of directors serving at same boards. Additionally, relying on an established argument in interlock research that board interlocks matter more in the face of higher uncertainties (Lamb & Roundy, 2016), firstly, I hypothesize firm age to be a moderator of the relationship between board interlocks and firm growth. Thus, I posit that interlocks will have a more significant role in the growth of new ventures as opposed to established firms, as the former ones are inherently uncertain and highly dependent entities. However, there are those new ventures more exposed to uncertainty, hence I further hypothesize that the board interlocks’ effect can be weighted differently depending on the type and degree of environmental uncertainty new ventures face. Further, I posit that the saliency of the focal relationship can differ depending on the relevance of flows between interlocking firms. Moreover, the position of new ventures and board directors within the board network infers the reach and opportunity to efficiently mobilize and utilize their resources, hence is hypothesized as another factor associated with new venture growth. The research question infers social network analysis together with regression analysis. The study design is longitudinal that is a step forward in board research (Mizruchi, 1996), as board ties may not have immediate effects on venture’s dependences and growth, rather, may materialize in the following year(s). To address the relationships, I employ the Norwegian registry data ? a longitudinal employeremployee matched dataset of all Norwegian residents and firms with the possibility to identify board directors and their affiliations, among an array of other variables/indicators. As of 2014, about 62,000 firms (out of ~124,000) have at least one common (interlocking) director with another firm, and among these, 25% are new ventures (15,000). In 2014, there are around 262,000 firm dyads sharing a common board director. At least one of the firms is a new venture in about 101,000 dyads (the samples of other years show similar characteristics). References Garg, S. , & Furr, N. (2017). Venture boards: past insights, future directions, and transition to public firm boards. Strategic Entrepreneurship Journal, 11(3), 326-343. Lamb, N. H. , & Roundy, P. (2016). The ? ties that bind? board interlocks research: a systematic review. Management Research Review, 39(11), 1516? 1542. Li, H. , Terjesen, S. , & Umans, T. (2018). Corporate governance in entrepreneurial firms: a systematic review and research agenda. Small Business Economics. Small Business Economics.