The performance effects of board interlocks in family firms

This study examines the phenomenon of board connections, in terms of interlocks among boards of directors (BoDs), as a key mechanism through which the human capital of board members unlocks relational capital at the firm level. We investigate how these interlocks influence profitability in the context of family firms. Our empirical analysis covers a sample of 70 publicly traded Italian family firms from 2014 to 2021, with 549 firm-year observations. The results indicate that interlocks are a pervasive phenomenon fostering the development of a relational ecosystem and thus strengthening the influence of business elites. Furthermore, the study demonstrates that the impact of interlocks on profitability is non-linear, with effects varying depending on the number of connections between firms.