| Summary: | This thesis examines the impact of director networks on corporate strategic decisions, and consists of three main studies. The first and the second investigate the influence of director networks on M&A short-term and long-term performance, respectively, using a sample of large Indian firms from the BSE 500 and CNX 500 indices from 2000 to 2014. Specifically, the key focus of the first two studies is whether the continuity of director networks affects the performance of bidding firms, and whether independent director networks matter to M&A short-term and long-term performance. Consistent with the market reaction to connected deals at the announcement date, the study shows a negative association between bidding firms’ operating performance following M&A transactions in which bidders and targets are connected through shared directors.
The third study examines the relationship between busy independent boards and corporate external finance using an unbalanced panel data of 445 top firms in India from 2000 to 2014. The results show that there is a negative association between busy independent boards and external leverage. The results reveal the existence of an internal capital market in Indian business groups, and shows a negative relationship between net loan receivers and external finance. The study also reflects that, compared to non-group firms with busy independent boards, group firms with a greater connectedness of independent directors face more limited access to external finance.
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