American companies are among the largest producers of chemical products. In this paper, I find that US firms in the chemical industry experience: i) significant costs in adding common directors to their boardrooms, ii) obtain a benefit relying on their joint partners, iii) prefer to form ties with similar firms, and iv) do not prefer to connect with firms with which they already have a common director. Building on an equilibrium framework, I estimate the board of directors networks from 2013 to 2018 as exponential random graphs, using a Bayesian approach. Specifically, I demonstrate that firms rely on their joint partners (transitivity) and prefer to form ties with firms with similar characteristics (homophily), which are two standard components of networks structural models. The results are consistent for all the years in analysis.
Working paper available upon request. Solo authored paper.
Annalisa Tonetto 