THE TRIAD THAT BINDS: HOW COMMON FINANCIAL ANALYST COVERAGE REVEALS DIFFERENT MOTIVATIONS OF CORPORATE LEADERS TO MAINTAIN BOARD INTERLOCKS

A substantial body of research has examined board of director interlocks, where a top executive affiliated with one organization sits on the board of directors of another organization as an outside director (Mizruchi, 1996). As a unique formal mechanism linking individual top managers of large corporations, board interlock has been suggested as a particularly fruitful research arena to examine the social embeddedness perspective that economic action is influenced by social structure (Davis & Greve, 1997; Galaskiewicz & Wasserman, 1989; Palmer et al., 1986). Despite this research attention, prior research on board interlock has focused on the relational embeddedness of interlocks at the dyad level, paying less attention to structural embeddedness, i.e., how the board interlock itself is linked with other external ties of the focal firm CEO and the outside directors. For instance, although corporate leaders ’ interaction with financial analysts and the influence of financial analysts on corporate strategies have been widely documented in the literature (Rao & Sivakumar, 1999; Useem, 1999; Zuckerman, 2000), fewer studies have attempted to investigate i) structural embeddedness of board interlocks in the financial analysts ’ firm coverage ties (e.g. how the individual executive-analyst ties overlap between the focal CEO and the interlocked directors) and ii) whether and how such structural embeddedness influences the maintenance of these two important networks. In this study, I examine how the maintenance of board interlock ties can be influenced by the positivity o