Board interlocks and corporate risk-taking: An empirical analysis of listed companies from tourism and related industries in China

Taking the tourism and related industry companies listed in Shanghai and Shenzhen of China from 2006 to 2019 as samples, this paper examines the impact of board interlock on corporate risk-taking and its micro-mechanism. Empirical evidence shows that board interlock can significantly improve corporate risk-taking, but the degree of influence varies from industry to industry. For the external risk sensitivity of industry, in the industry with high external risk sensitivity, the “quantity embedding” of interlocking directors has a stronger promoting effect on enterprise risk-taking. However, in industries with low external risk sensitivity, the “quality embedding” of interlocking directors has a stronger promoting effect on enterprise risk-taking. For the degree of industry competition, the more intense the industry competition, the stronger the role of board interlocks in promoting enterprise risk-taking. Further analysis shows that the intensity of information effect and the intensity of resource effect vary with the degree of information asymmetry and the type of directors.