Interlocking Directorates and Collusion: An Empirical Analysis

Although several works have suggested that interlocking directorates are mechanisms that have the potential to facilitate collusion, few studies have investigated the matter empirically, and none have systematically considered known cartel cases. Taking a European perspective, and focusing on four different time periods, the present work investigates the extent to which companies that are directly and indirectly connected via interlocking directorships simultaneously or subsequently collude. Utilizing network analysis software the study provides a new method for identifying the two forms of business ties and possible overlaps between them. The analysis is based on an original dataset of European Community cartel cases and data on interlocking directorates developed by others. Very few examples are found of colluding companies that were previously directly or indirectly connected via interlocking directorates. This finding suggests that interlocking directorates rarely facilitate collusive activities.