Associate Professor Kung-Cheng Ho, a researcher of the Base, has published a collaborative paper titled "Near is more: learning efficiency in research and development innovation among interlocking firms" in Financial Innovation.

Abstract:

Research question/issue

This study examines whether geographic proximity produces a proximity preference as interlocking firms observe each other and learn innovative behaviors through information transmission among interlocking directors.

Research findings/insights

We study the performance of A-share-listed companies in China from 2007 to 2017 on the basis of resource dependence theory, agglomeration effect theory, and Porter’s competitive theory. When target firms learn about research and development–related innovation behaviors from interlocking firms closer to them, they experience more efficient learning effects and have improved convergent traits. Moreover, this proximity advantage increases the willingness of the target firm to communicate with and learn from interlocking firms closer to them. Highly developed areas and research and development–intensive industries positively affect the learning efficiency of interlocking firms.

Theoretical/academic implications

Our conclusion is consistent with resource dependence theory; target firms in highly developed areas are more willing to imitate and study nearby interlocking firms to maintain their peer relations, innovation potential, and competitiveness. Our conclusion is also consistent with competition theory, which states that the exchange of information between target firms in highly research and development–intensive industries and distant interlocking firms increases innovation differentiation, innovation potential, and competitiveness, even when such exchange has a high cost.

Practitioner/policy implications

The results support resource dependence theory and peers' effects. The information obtained by interlocking directorates through external social relations guides firm decision-making, and closer distances reveal more obvious effects.

Keywords：Geographical distance, Interlocking directorates, R&D, Learning efciency

Link：https://jfin-swufe.springeropen.com/articles/10.1186/s40854-022-00357-2

Teacher profile

Kung-Cheng Ho, Doctor of Taiwan Yuanzhi University, master supervisor of Finance, master supervisor of financial Engineering. His research interest covers Corporate finance, credit risk management, corporate social responsibility, information asymmetry risk and cross-disciplinary research. His research interest is in the Asia-Pacific Journal of Accounting & Economics, Corporate Governance: An International Review, Emerging Markets Review, Energy Economics, International Review of Economics & Finance, International Review of Financial Analysis, Journal of Accounting, Auditing and Finance, Journal of Business Research, Journal of Corporate Finance, Journal of Forecasting, Pacific-Baisn Finance Journal, Review of Quantitative Finance and Accounting and other international SSCI journals published more than 40 articles, including 1 ABS 4-star journals, 12 three-star journals and 17 SSCI first-region journals. In addition, he has preached papers in dozens of important academic conferences at home and abroad. Including China Annual Finance Conference, China Annual Financial Engineering Conference, China Annual Management Conference, CICF, American Accounting Association, Asian Finance Association, European Finance Association, Europe Financial Management Association, Financial Management Association, Taiwan Management Institute, Western Economic Association International, etc. In addition, he has reviewed manuscripts for more than 20 journals at home and abroad, including Asia Pacific Journal of Management, Corporate Governance: An International Review, Economic Modelling, Emerging Markets Finance and Trade, Financial Innovation, Investment Analysts Journal, International Journal of Emerging Markets, International Review of Economics and Finance,  Managerial and Decision Economics, etc.