Board Interlock Network Analysis

You start with a two-mode affiliation matrix recording which directors sit on which boards, then project it to a one-mode firm network by multiplying the matrix by its transpose. Each resulting off-diagonal entry counts the directors two firms share, defining a weighted tie between them. As Mizruchi emphasizes, decisions made here — bounding the firm set, the time window, whether to keep tie weights, and whether to separate directional ties created by executives from neutral outside-director ties — fundamentally shape the network and any conclusions drawn from it.

Establishing causation is the field's central challenge. Davis's poison-pill study showed that firms interlocked with prior adopters were more likely to adopt, consistent with diffusion through directors. But Mizruchi cautioned that demonstrating real consequences of interlocks is much harder than documenting that interlocks exist, because shared directors correlate with shared industry, size, and geography. Credible claims require controlling for these confounds and respecting temporal order — neighbors must adopt before the focal firm — so that influence is distinguished from mere homophily.

Degree centrality counts a firm's direct interlock partners; betweenness captures how often it bridges otherwise disconnected firms; eigenvector or Bonacich centrality rewards being tied to other central firms; and structural-hole measures gauge brokerage versus constraint. Mizruchi links these positions to the proposed functions of interlocks: central, well-connected firms are better placed for information access, cooptation, and legitimacy. In analyses, these metrics serve as predictors testing whether a firm's location in the corporate network shapes its choices, influence, and outcomes.