9320930 Mizruchi This is a study of the extent to which large American corporations engage in business transactions with the firms represented on their boards of directors. Drawing on the resource dependence perspective, political sociology, and agency theory, the study develops a model to predict the conditions under which corporations do business with firms to which they have directorate interlocks. Taking advantage of a 1978 Securities and Exchange Commission ruling that mandated that firms disclose business relations with the firms of their board members, the model will be tested with data on the 500 largest U.S. manufacturing corporations from 1981 (the first year for which reliable business transaction data exist) through 1992. Because the design is longitudinal, the study will permit the examination of a series of questions that involve reciprocal causation, including: (1) the effect of the presence of a lending banker in a firm's board on the firm's access to subsequent financing; (2) the extent to which such financing comes from the board member's institution; (3) the extent to which lending banks are appointed to a firm's board after a loan is made; and (4) whether ties with lending banks are more likely than ties with non-lending banks to be replaced when accidentally broken. %%% This study will contribute to economic sociology, political sociology, and to the development and testing of general sociological theories. Its findings will be of significant value for policy-makers concerned that directorate interlocks may lead to poor investment decisions, or conversely that such social relationships linking corporations can enhance productivity. Thus, the information gained from this research will help improve American economic efficiency and competitiveness. ***
