Study on the Influence of Directors’ Network Centrality on Listed Companies’ Participation in OFDI

As a form of corporate governance structure, the board system defines the allocation and exercise of internal power within a company, making it an extremely important system. Directors make decisions in the name of the board of directors and are responsible for the long-term operation of the company. The set of connections established between the directors of the board of directors of a company by serving on a board is called the director network. The degree of director network centrality represents the relative position of individual directors and the board of directors in the whole network, and the higher the degree of director network centrality indicates a high degree of direct connection between enterprises. Based on the social network analysis method, this paper examines the influence of director network centrality on listed companies’ participation in Outward Foreign Direct Investment (OFDI). The empirical results show that the improvement of directors’ network centrality has a significant promoting effect on enterprises’ participation in OFDI. Directors’ network centrality may promote enterprises’ participation in OFDI by reducing the degree of financing constraints. The theoretical analysis and empirical findings of this paper not only expand the relevant research on enterprises’ access to resources through the informal system of director relationship network, but also enrich the literature on the influencing factors of OFDI in Chinese enterprises.