The Co-Evolution of Board Networks and Corporate Strategic Action

Abstract

Network dynamics and network outcomes are two popular research streams in management studies. However, even when assessing the same phenomenon, these research streams are usually treated separately. Using the example of interlocking directorates and corporate strategic actions in the form of acquisitions and divestitures, we model dynamics and outcomes as a co-evolution process. We show that, while acquisitions and divestitures influence changes in the focal firm’s network, they are also explained by the focal firm’s network position. Our results suggest that co-evolution approaches offer a more nuanced view than traditional analysis and have merit for the field of management studies.