Consorcio De Universidades Doctorado En Gestión
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CONSORCIO DE UNIVERSIDADES DOCTORADO EN GESTIÓN ESTRATÉGICA Structure analysis of the corporate network of interlocking directorates in Peru TESIS PARA OPTAR EL GRADO ACADÉMICO DE DOCTOR EN GESTIÓN ESTRATÉGICA CON MENCIÓN EN GESTIÓN EMPRESARIAL Y SOSTENIBILIDAD Autor: Miguel Ignacio Córdova Espinoza Asesor: Erica Helena Salvaj Carrera Julio de 2020 Lima - Perú i Acknowledgments To my family. It would be impossible to do this without the lovely support of my wife, Patty, and my children, Xime and Nico, who I love beyond limits. To my parents, Félix and Elsa, and my brother Daniel, who always are alongside me, providing love and good advice. To my thesis director, Professor Erica Salvaj, who enlighted me on how my teaching and research could become the beautiful lifestyle it is today. To my sister, Ale, who always stands beside me, fighting as a dragon in unknown lands. To the Department of Management Sciences team in PUCP, whose support was instrumental to this achievement. To all those who attain a huge power through their position, relationships, knowledge, economic welfare, paternity, trust, or even from a lovely gesture, may God lead their paths to do good or may exist enough means to do justice. ii Abstract There is little knowledge about informal power structures and how they have influenced corporate governance and organizational behavior in Latin America. Firms’ directors tend to establish informal mechanisms for control and influence, creating ties with other firms by sitting on their boards. These corporate connections are called Interlocking Directorates (IDs). Trying to adapt with the environment and to changes, firms create IDs for different reasons. As a result, business agents develop unique national power structures. This study is focused on an extended literature review related to IDs, analyzing the structure of the Peruvian corporate network of IDs, and its evolution through four periods under analysis: 2000, 2005, 2010, and 2015. The sample includes 5,591 registers (board sits), 2,689 directors, and 298 different firms distributed over the four periods previously mentioned. The study uses centrality measures, UCINET 6.0, and NetDraw in order to analyze the main structure of the Peruvian corporate network and its participants’ characteristics within. The study’s main finding suggests the existence of an evolving Peruvian corporate network of large firms connected through IDs. In addition, the research results provide evidence that this Peruvian corporate network of IDs would be resilient to global economic crises, while being more sensitive to local political crises. Another important findings suggest that its participants changed their roles over time, and that the 1990s privatization process allows for a growing Peruvian business elite of directors. Finally, paths for further research are also proposed. Key words: interlocks, directors, corporate network, business elite, board interlocks iii Resumen Hay poco conocimiento acerca de cómo las estructuras informales de poder han influenciado el gobierno corporativo y el comportamiento organizacional en América Latina. Los directores de las empresas tienden a establecer mecanismos informales de control e influencia, creando vínculos con otras empresas, formando parte de sus directorios. Estas conexiones corporativas se llaman Interlocking Directorates (IDs). Tratando de adaptarse al entorno y a los cambios, las empresas crean IDs por diferentes razones. Como resultado, los agentes de negocios desarrollan estructuras nacionales de poder únicas. Este estudio está enfocado en una extensa revisión de literatura de IDs, analizando la estructura de la red corporativa peruana de IDs y su evolución a través de cuatro períodos de análisis: 2000, 2005, 2010, y 2015. La muestra incluye 5,591 registros (sillas de directorio), 2,689 directores, y 298 empresas diferentes distribuidas en los cuatro períodos mencionados previamente. El estudio usa medidas de centralidad, UCINET 6.0, y NetDraw para analizar la estructura principal de la red corporativa peruana y sus participantes. Los hallazgos principales del estudio sugieren la existencia de una red corporativa peruana de grandes empresas en evolución, conectadas a través de IDs. Adicionalmente, los resultados de la investigación proveen evidencia que esta red corporativa peruana sería resiliente a las crisis económicas globales, mientras es también más sensitiva a las crisis políticas locales. Otros hallazgos importantes sugieren que sus participantes cambian de rol en el tiempo, y que el proceso de privatización iniciado en los años 90 permite el crecimiento de una élite de negocios peruana conformada por directores. Finalmente, se proponen caminos para futuras investigaciones. Palabras clave: directores, red corporativa, élite de negocios, directorios entrelazados iv Table of contents Acknowledgments .................................................................................................i Abstract ................................................................................................................. ii Resumen .............................................................................................................. iii Table of contents ................................................................................................. iv List of tables ......................................................................................................... vi List of figures ....................................................................................................... ix Introduction ........................................................................................................... 1 Chapter 1. Theoretical framework ....................................................................... 7 1.1. Social networks theory ....................................................................................... 7 1.2. Resource dependence theory ............................................................................ 8 1.3. Institutional theory .............................................................................................. 9 1.4. The corporate networks of interlocking directorates ......................................... 10 1.4.1. Description of structures ........................................................................... 13 1.4.1.1. Boards composition and interests……………………………………….13 1.4.1.2. IDs network structural resilience…………………………………………16 1.4.2. Organizational outcomes .......................................................................... 20 1.4.2.1. Dealing with uncertainty………………………………………………….20 1.4.2.2. Sharing more than resources…………………………………………….21 1.4.2.3. Providing financial benefits………………………………………………23 Chapter 2. The case of Peru 2000-2015 ............................................................. 28 2.1. Institutional background ................................................................................... 28 2.2. Institutional environment .................................................................................. 29 2.3. Institutional arrangements ................................................................................ 33 Chapter 3. Methods and data ............................................................................. 38 3.1. Data description ............................................................................................... 38 v 3.2. Analysis procedure .......................................................................................... 43 3.3. Describing SNA measures ............................................................................... 45 Chapter 4. Discussion of the results ................................................................. 47 4.1. Peruvian corporate network evolution: 2000-2015 ........................................... 47 4.2. Analysis of corporate network structure per period ........................................... 52 4.2.1. Discussion for period 2000 ........................................................................ 52 4.2.2. Discussion for period 2005 ........................................................................ 58 4.2.3. Discussion for period 2010 ........................................................................ 65 4.2.4. Discussion for period 2015 ........................................................................ 72 Conclusions ........................................................................................................ 81 Limitations and future research ......................................................................... 87 References .......................................................................................................... 91 Appendices ....................................................................................................... 110 vi List of tables Table 1. Privatization and concession processes made per presidential period 1990- 2015........................................................................................................................ 34 Table 2. Firms in the sample per each period of analysis ........................................ 39 Table 3. Directors in the sample per each period of analysis .................................. 39 Table 4. Mandates in the sample per each period of analysis ................................. 39 Table 5. Firms in the sample, by economic sector .................................................. 40 Table 6. Firms in the sample by nationality