Exploring Political Connections and Board Interlocking Through Social Network Analysis

This paper focuses its attention on political connection and Board interlocking among firms. If abstractly, political connections and board interlocking influence is evident, its detection and disclosing appear very difficult. The idea at the base of the paper is that network science theories and data visualization technics might be suitable for political connection and board interlocking detection and disclosing. We investigate if and how Social Network Analysis (SNA) could be a revealing one. In particular we use SNA to `explore the hidden relationship among corporate organizations. Using, as case study, the data of Pakistan stock exchange for the period of 2009 to 2015, this work found the deep penetration of political connections and its board interlocking. SNA techniques allow us to find the web of network in which corporations build their relationship with the political connected firms for the valuable access of resources. More than 70% of the investigated firms were found interlocked through the consecutive years. Results were found stronger with the increase of the number of political connections in the board.