ArticlePDF Available

Abstract and Figures

The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic "super-entity" that raises new important issues both for researchers and policy makers.
Content may be subject to copyright.
The Network of Global Corporate Control
Stefania Vitali, James B. Glattfelder, Stefano Battiston*
Chair of Systems Design, ETH Zurich, Zurich, Switzerland
The structure of the control network of transnational corporations affects global market competition and financial stability.
So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We
present the first investigation of the architecture of the international ownership network, along with the computation of the
control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large
portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic ‘‘super-
entity’’ that raises new important issues both for researchers and policy makers.
Citation: Vitali S, Glattfelder JB, Battiston S (2011) The Network of Global Corporate Control. PLoS ONE 6(10): e25995. doi:10.1371/journal.pone.0025995
Editor: Alejandro Raul Hernandez Montoya, Universidad Veracruzana, Mexico
Received March 29, 2011; Accepted September 15, 2011; Published October 26, 2011
Copyright: ß2011 Vitali et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits
unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Funding: The authors acknowledge financial support from the ETH Competence Center ‘‘Coping with Crises in Complex Socio-Economic Systems’’ (CCSS)
through ETH Research Grant CH1-01-08-2; the European Commission FP7 FET Open Project ‘‘FOC’’ No. 255987. The funders had no role in study design, data
collection and analysis, decision to publish, or preparation of the manuscript.
Competing Interests: The authors have declared that no competing interests exist.
* E-mail:
A common intuition among scholars and in the media sees the
global economy as being dominated by a handful of powerful
transnational corporations (TNCs). However, this has not been
confirmed or rejected with explicit numbers. A quantitative
investigation is not a trivial task because firms may exert control
over other firms via a web of direct and indirect ownership
relations which extends over many countries. Therefore, a
complex network analysis [1] is needed in order to uncover the
structure of control and its implications. Recently, economic
networks have attracted growing attention [2], e.g., networks of
trade [3], products [4], credit [5,6], stock prices [7] and boards of
directors [8,9]. This literature has also analyzed ownership
networks [10,11], but has neglected the structure of control at a
global level. Even the corporate governance literature has only
studied small national business groups [12]. Certainly, it is
intuitive that every large corporation has a pyramid of
subsidiaries below and a number of shareholders above.
However, economic theory does not offer models that predict
how TNCs globally connect to each other. Three alternative
hypotheses can be formulated. TNCs may remain isolated,
cluster in separated coalitions, or form a giant connected
component, possibly with a core-periphery structure. So far, this
issue has remained unaddressed, notwithstanding its important
implications for policy making. Indeed, mutual ownership
relations among firms within the same sector can, in some cases,
jeopardize market competition [13,14]. Moreover, linkages
among financial institutions have been recognized to have
ambiguous effects on their financial fragility [15,16]. Verifying
to what extent these implications hold true in the global economy
is per se an unexplored field of research and is beyond the scope of
this article. However, a necessary precondition to such investi-
gations is to uncover the worldwide structure of corporate
control. This was never performed before and it is the aim of the
present work.
Ownership refers to a person or a firm owning another firm
entirely or partially. Let Wdenote the ownership matrix, where
the component Wij [½0, 1is the percentage of ownership that the
owner (or shareholder)iholds in firm j. This corresponds to a
directed weighted graph with firms represented as nodes and
ownership ties as links. If, in turn, firm jowns Wjl shares of firm l,
then firm ihas an indirect ownership of firm l(Figure 1 A). In the
simplest case, this amounts trivially to the product of the shares of
direct ownership Wij Wjl . If we now consider the economic value v
of firms (e.g., operating revenue in USD), an amount Wij vjis
associated to iin the direct case, and Wij Wjl vlin the indirect case.
This computation can be extended to a generic graph, with some
important caveats [17], Appendix S1, Sections 3.1 and 3.2.
Each shareholder has the right to a fraction of the firm revenue
(dividend) and to a voice in the decision making process (e.g.,
voting rights at the shareholder meetings). Thus the larger the
ownership share Wij in a firm, the larger is the associated control
over it, denoted as Cij . Intuitively, control corresponds to the
chances of seeing one’s own interest prevailing in the business
strategy of the firm. Control Cij is usually computed from
ownership Wij with a simple threshold rule: the majority
shareholder has full control. In the example of Figure 1 C, D,
this yields Cij vj~1vjin the direct case and Cij Cjl vl~0in the
indirect case. As a robustness check, we tested also more
conservative models where minorities keep some control (see
Appendix S1, Section 3.1). In analogy to ownership, the extension
to a generic graph is the notion of network control:cnet
XjCij vjzXjCijcnet
j. This sums up the value controlled by i
through its shares in j, plus the value controlled indirectly via the
network control of j. Thus, network control has the meaning of the
total amount of economic value over which ihas an influence (e.g.
i~vjzvkin Figure 1 D).
Because of indirect links, control flows upstream from many
firms and can result in some shareholders becoming very powerful.
PLoS ONE | 1 October 2011 | Volume 6 | Issue 10 | e25995
However, especially in graphs with many cycles (see Figures 1
Band S4 in Appendix S1), the computation of cnet , in the basic
formulation detailed above, severely overestimates the control
assigned to actors in two cases: firms that are part of cycles (or
cross-shareholding structures), and shareholders that are upstream
of these structures. An illustration of the problem on a simple
network example, together with the details of the method are
provided in Appendix S1, Sections 3.2–3.4. A partial solution for
small networks was provided in [18]. Previous work on large
control networks used a different network construction method
and neglected this issue entirely [11], Appendix S1, Sections 2 and
3.5. In this paper, by building on [11], we develop a new
methodology to overcome the problem of control overestimation,
which can be employed to compute control in large networks.
We start from a list of 43060 TNCs identified according to the
OECD definition, taken from a sample of about 30 million
economic actors contained in the Orbis 2007 database (see
Appendix S1, Section 2). We then apply a recursive search (Figure
S1 and Section 2 in Appendix S1) which singles out, for the first
time to our knowledge, the network of all the ownership pathways
originating from and pointing to TNCs (Figure S2 in Appendix
S1). The resulting TNC network includes 600508 nodes and
1006987 ownership ties.
Notice that this data set fundamentally differs from the ones
analyzed in [11] (which considered only listed companies in
separate countries and their direct shareholders). Here we are
interested in the true global ownership network and many TNCs
are not listed companies (see also Appendix S1, Section 2).
Network Topology
The computation of control requires a prior analysis of the
topology. In terms of connectivity, the network consists of many
small connected components, but the largest one (3/4 of all nodes)
contains all the top TNCs by economic value, accounting for
94.2% of the total TNC operating revenue (Table 1). Besides the
usual network statistics (Figures S5 and S6 in Appendix S1), two
topological properties are the most relevant to the focus of this
work. The first is the abundance of cycles of length two (mutual
cross-shareholdings) or greater (Figure S7 and Section 7 in
Appendix S1), which are well studied motifs in corporate
governance [19]. A generalization is a strongly connected component
(SCC), i.e., a set of firms in which every member owns directly
and/or indirectly shares in every other member. This kind of
structures, so far observed only in small samples, has explanations
such as anti-takeover strategies, reduction of transaction costs, risk
sharing, increasing trust and groups of interest [20]. No matter its
origin, however, it weakens market competition [13,14]. The
second characteristics is that the largest connect component
Figure 1. Ownership and Control. (A&B) Direct and indirect ownership. (A) Firm ihas Wij percent of direct ownership in firm j. Through j, it has
also an indirect ownership in kand l. (B) With cycles one has to take into account the recursive paths, see Appendix S1, Section 3.1. (C&D) Threshold
model. (C) Percentages of ownership are indicated along the links. (D) If a shareholder has ownership exceeding a threshold (e.g. 50%), it has full
control (100%) and the others have none (0%). More conservative model of control are also considered see Appendix S1, Section 3.1.
The Network of Global Corporate Control
PLoS ONE | 2 October 2011 | Volume 6 | Issue 10 | e25995
contains only one dominant strongly connected component (1347
nodes). Thus, similar to the WWW, the TNC network has a bow-tie
structure [21] (see Figure 2 A and Appendix S1, Section 6). Its
peculiarity is that the strongly connected component, or core,is
very small compared to the other sections of the bow-tie, and that
the out-section is significantly larger than the in-section and the
tubes and tendrils (Figure 2 B and Table 1). The core is also very
densely connected, with members having, on average, ties to 20
other members (Figure 2 C, D). As a result, about 3/4 of the
ownership of firms in the core remains in the hands of firms of the
core itself. In other words, this is a tightly-knit group of
corporations that cumulatively hold the majority share of each
Notice that the cross-country analysis of [11] found that only a
few of the national ownership networks are bow-ties, and,
Figure 2. Network topology. (A) A bow-tie consists of in-section (IN), out-section (OUT), strongly connected component or core (SCC), and tubes
and tendrils (T&T). (B) Bow-tie structure of the largest connected component (LCC) and other connected components (OCC). Each section volume
scales logarithmically with the share of its TNCs operating revenue. In parenthesis, percentage of operating revenue and number of TNCs, cfr. Table 1.
(C) SCC layout of the SCC (1318 nodes and 12191 links). Node size scales logarithmically with operation revenue, node color with network control
(from yellow to red). Link color scales with weight. (D) Zoom on some major TNCs in the financial sector. Some cycles are highlighted.
Table 1. Bow-tie statistics.
TNC (#)SH(#)PC(#)OR(%)
LCC 15491 47819 399696 94.17
IN 282 5205 129 2.18
SCC 295 0 1023 18.68
OUT 6488 0 318073 59.85
T&T 8426 42614 80471 13.46
OCC 27569 29637 80296 5.83
Percentage of total TNC operating revenue (OR) and number (#) of nodes in
the sections of the bow-tie (acronyms are in Figure 2). Economic actors types
are: shareholders (SH), participated companies (PC).
The Network of Global Corporate Control
PLoS ONE | 3 October 2011 | Volume 6 | Issue 10 | e25995
importantly, for the Anglo-Saxon countries, the main strongly
connected components are big compared to the network size.
Concentration of Control
The topological analysis carried out so far does not consider the
diverse economic value of firms. We thus compute the network
control that economic actors (including TNCs) gain over the
TNCs’ value (operating revenue) and we address the question of
how much this control is concentrated and who are the top control
holders. See Figure S3 in Appendix S1 for the distribution of
control and operating revenue.
It should be noticed that, although scholars have long
measured the concentration of wealth and income [22], there is
no prior quantitative estimation for control. Constructing a
Lorenz-like curve (Figure 3) allows one to identify the fraction g
of top holders holding cumulatively 80% of the total network
control. Thus, the smaller this fraction, the higher the
concentration. In principle, one could expect inequality of
control to be comparable to inequality of income across
households and firms, since shares of most corporations are
publicly accessible in stock markets. In contrast, we find that only
737 top holders accumulate 80% of the control over the value of
all TNCs (see also the list of the top 50 holders in Table S1 of
Appendix S1). The corresponding level of concentration is
2~4:35% for operating
revenue. Other sensible comparisons include: income distribution
in developed countries with g
3*5%{10% [22] and corporate
revenue in Fortune1000 (g
4*30% in 2009). This means that
network control is much more unequally distributed than wealth.
In particular, the top ranked actors hold a control ten times
bigger than what could be expected based on their wealth. The
results are robust with respect to the models used to estimate
control, see Figure 3 and Tables S2 and S3 in Appendix S1.
The fact that control is highly concentrated in the hands of few
top holders does not determine if and how they are interconnect-
ed. It is only by combining topology with control ranking that we
obtain a full characterization of the structure of control. A first
question we are now able to answer is where the top actors are
located in the bow-tie. As the reader may by now suspect, powerful
actors tend to belong to the core. In fact, the location of a TNC in
the network does matter. For instance, a randomly chosen TNC in
the core has about 50% chance of also being among the top
holders, compared to, e.g., 6% for the in-section (Table S4 in
Appendix S1). A second question concerns what share of total
control each component of the bow-tie holds. We find that, despite
its small size, the core holds collectively a large fraction of the total
network control. In detail, nearly 4=10 of the control over the
economic value of TNCs in the world is held, via a complicated
web of ownership relations, by a group of 147 TNCs in the core,
which has almost full control over itself. The top holders within the
core can thus be thought of as an economic ‘‘super-entity’’ in the
global network of corporations. A relevant additional fact at this
point is that 3=4of the core are financial intermediaries. Figure 2
D shows a small subset of well-known financial players and their
links, providing an idea of the level of entanglement of the entire
This remarkable finding raises at least two questions that are
fundamental to the understanding of the functioning of the global
economy. Firstly, what are the implication for global financial
stability? It is known that financial institutions establish financial
Figure 3. Concentration of network control and operating revenue. Economic actors (TNCs and shareholders) are sorted by descending
importance, as given by cnet. A data point located at (g,h) corresponds to a fraction gof top economic actors cumulatively holding the fraction hof
network control, value or operating revenue. The different curves refer to network control computed with three models (LM, TM, RM), see Appendix
S1, Section 3.1, and operating revenue. The horizontal line denotes a value of hequal to 80%. The level of concentration is determined by the gvalue
of the intersection between each curve and the horizontal line. The scale is semi-log.
The Network of Global Corporate Control
PLoS ONE | 4 October 2011 | Volume 6 | Issue 10 | e25995
contracts, such as lending or credit derivatives, with several other
institutions. This allows them to diversify risk, but, at the same
time, it also exposes them to contagion [15]. Unfortunately,
information on these contracts is usually not disclosed due to
strategic reasons. However, in various countries, the existence of
such financial ties is correlated with the existence of ownership
relations [23]. Thus, in the hypothesis that the structure of the
ownership network is a good proxy for that of the financial
network, this implies that the global financial network is also very
intricate. Recent works have shown that when a financial network
is very densely connected it is prone to systemic risk [16,24].
Indeed, while in good times the network is seemingly robust, in
bad times firms go into distress simultaneously. This knife-edge
property [25,26] was witnessed during the recent financial turmoil.
Secondly, what are the implications for market competition?
Since many TNCs in the core have overlapping domains of
activity, the fact that they are connected by ownership relations
could facilitate the formation of blocs, which would hamper
market competition [14]. Remarkably, the existence of such a core
in the global market was never documented before and thus, so
far, no scientific study demonstrates or excludes that this
international ‘‘super-entity’’ has ever acted as a bloc. However,
some examples suggest that this is not an unlikely scenario. For
instance, previous studies have shown how even small cross-
shareholding structures, at a national level, can affect market
competition in sectors such as airline, automobile and steel, as well
as the financial one [13,14]. At the same time, antitrust institutions
around the world (e.g., the UK Office of Fair Trade) closely
monitor complex ownership structures within their national
borders. The fact that international data sets as well as methods
to handle large networks became available only very recently, may
explain how this finding could go unnoticed for so long.
Two issues are worth being addressed here. One may question
the idea of putting together data of ownership across countries
with diverse legal settings. However, previous empirical work
shows that of all possible determinants affecting ownership
relations in different countries (e.g., tax rules, level of corruption,
institutional settings, etc.), only the level of investor protection is
statistically relevant [27]. In any case, it is remarkable that our
results on concentration are robust with respect to three very
different models used to infer control from ownership. The second
issue concerns the control that financial institutions effectively
exert. According to some theoretical arguments, in general,
financial institutions do not invest in equity shares in order to
exert control. However, there is also empirical evidence of the
opposite [23], Appendix S1, Section 8.1. Our results show that,
globally, top holders are at least in the position to exert
considerable control, either formally (e.g., voting in shareholder
and board meetings) or via informal negotiations.
Beyond the relevance of these results for economics and policy
making, our methodology can be applied to identify key nodes in
any real-world network in which a scalar quantity (e.g., resources
or energy) flows along directed weighted links. From an empirical
point of view, a bow-tie structure with a very small and influential
core is a new observation in the study of complex networks. We
conjecture that it may be present in other types of networks where
‘‘rich-get-richer’’ mechanisms are at work (although a degree
preferential-attachment [1] alone does not produce a bow-tie).
However, the fact that the core is so densely connected could be
seen as a generalization of the ‘‘rich-club phenomenon’’ with
control in the role of degree [3,28], Appendix S1, Section 8.2.
These related open issues could be possibly understood by
introducing control in a ‘‘fitness model’’ [29] of network evolution.
Supporting Information
Appendix S1 Supporting material: Acronyms and abbrevia-
tions, Data and TNC Network Detection, Network Control,
Degree and Strength Distribution Analysis, Connected Compo-
nents Analysis, Bow-Tie Component Size, Strongly Connected
Component Analysis, Network Control Concentration, Additional
Authors acknowledge F. Schweitzer and C. Tessone for valuable feedback,
D. Garcia for generating the 3D figures, and the program Cuttlefish used
for networks layout.
Author Contributions
Conceived and designed the experiments: SB. Analyzed the data: SV JBG.
Wrote the paper: SB SV JBG.
1. Baraba´si A, Albert R (1999) Emergence of scaling in random networks. Science
286: 509.
2. Schweitzer F, Fagiolo G, Sornette D, Vega-Redondo F, Vespignani A, et al.
(2009) Economic networks: The new challenges. Science 325: 422–425.
3. Fagiolo G, Reyes J, Schiavo S (2009) World-trade web: Topological properties,
dynamics, and evolution. Phys Rev E 79: 36115.
4. Hidalgo C, Hausmann R (2009) The building blocks of economic complexity.
Proc Natl Acad Sci 106: 10570.
5. Boss M, Elsinger H, Summer M, Thurner S (2004) Network topology of the
interbank market. Quant Financ 4: 677–684.
6. Iori G, De Masi G, Precup O, Gabbi G, Caldarelli G (2008) A network analysis
of the Italian overnight money market. J Econ Dyn Control 32: 259–278.
7. Bonanno G , Caldarelli G, L illo F, Mantegna RN (2003) Topology of
correlation-based minimal spanning trees in real and model markets. Phys
Rev E 68: 046130.
8. Strogatz S (2001) Exploring complex networks. Nature 410: 268–276.
9. Battiston S, Catanzaro M (2004) Statistical properties of corporate board and
director networks. Eur Phys J B 38: 345–352.
10. Kogut B, Walker G (2001) The small world of germany and the durability of
national networks. Amer Sociol Rev 66: 317–335.
11. Glattfelder JB, Battiston S (2009) Backbone of complex networks of
corporations: The flow of control. Phys Rev E 80.
12. Granovetter M Ind. Corp. Change, Oxford University Press, chapter Coase
Revisited: Business Groups in the Modern Economy.
13. O’Brien D, Salop S (1999) Competitive Effects of Partial Ownership: Financial
Interest and Corporate Control. Antitrust Law J 67: 559.
14. Gilo D, Moshe Y, Spiegel Y (2006) Partial cross ownership and tacit collusion.
RAND J Econ 37: 81–99.
15. Allen F, Gale D (2000) Financial contagion. J Polit Econ 108: 1–33.
16. Stiglitz JE (2010) Risk and global economic architecture: Why full financial
integration may be undesirable. Working Paper 15718, NBER. URL http://
17. Brioschi F, Buzzacchi L, Colombo M (1989) Risk capital financing and the
separation of ownership and control in business groups. J Bank Financ 13:
18. Baldone S, Brioschi F, Paleari S (1998) Ownership Measures Among Firms
Connected by Cross-Shareholdings and a Further Analogy with Input-Output
Theory. 4th JAFEE International Conference on Investment and Derivatives.
19. Dietzenbacher E, Temurshoev U (2008) Ownership relations in the presence of
cross-shareholding. J Econ 95: 189–212.
20. Williamson O (1975) Markets and hierarchies, analysis and antitrust implica-
tions: a study in the economics of internal organization. Free Press, New York.
21. Broder A, Kumar R, Maghoul F, Raghavan P, Rajagopalan S, et al. (2000)
Graph structure in the Web. Comput Netw 33: 309–320.
22. Atkinson A, Bourguignon F (2000) Handbook of income distribution. Elsevier.
23. Santos J, Rumble A (2006) The American keiretsu and universal banks:
Investing, voting and sitting on nonfinancials’ corporate boards. J Finan Econ
80: 419–454.
The Network of Global Corporate Control
PLoS ONE | 5 October 2011 | Volume 6 | Issue 10 | e25995
24. Battiston S, Delli Gatti D, Gallegati M, Greenwald B, Stiglitz J (2009) Liaisons
dangereuses: Increasing connectivity, risk sharing and systemic risk. Working
Paper 15611, NBER.
25. Alesandri P, Haldane A (2009) Banking on the state. Speech given at the Bank of
England. Available at
26. May R, Levin S, Sugihara G (2008) Ecology for bankers. Nature 451: 893–895.
27. La Porta R, de Silanes FL, Shleifer A (1999) Corporate ownership around the
world. J Finance 54: 471–517.
28. Colizza V, Flammini A, Serrano M, Vespignani A (2006) Detecting rich-club
ordering in complex networks. Nat Phy 2: 110–115.
29. Garlaschelli D, Capocci A, Caldarelli G (2007) Self-organized network evolution
coupled to extremal dynamics. Nat Phys 3: 813–817.
The Network of Global Corporate Control
PLoS ONE | 6 October 2011 | Volume 6 | Issue 10 | e25995

Supplementary resource (1)

... As Vitali et al. (2011) have indicated, corporations have appropriated almost all capital. Only 144 of them own 40% of the world's Gross Domestic Product (GDP) and 700 of them own 80% of the world's GDP. ...
... As denounced for decades, not only Naomi Klein (2002), Chomsky & Waterstone (2021), but also Joel Bakan (2004;, Hernández Zubizarreta et al. (2012) and Vitali et al. (2011), the growing power that the large transnational corporations have obtained has not only made them the owners of the planet, has made them practically untouchable. ...
... Corporations, as perverse entities (Bakan, 2004), enemies of democracy (Bakan, 2020), omnipresent (Klein, 2002) and omnipotent (Vitali et al., 2011), buy governments, establish laws and deceive citizens. In all possible ways. ...
... This observation suggests that these asset managers may play a powerful role in the global ownership network. Yet, the existing studies are not equipped with adequate measures or models to describe their ownership influence [4][5][6][7]. In particular, most studies measure the ultimate owners' power to control companies, but the asset managers are not the ultimate owners; they are intermediate shareholders that are also owned by their ultimate owners. ...
... The ownership network that we analyze represents the global network in the sense that, unlike previous studies [15,[18][19][20][21][22][23][24][25][26], our analysis includes companies and shareholders irrespective of their registered country or sectors. We also include in our analysis the shares in any publicly listed company, unlike previous studies focusing only on transnational corporations [4], large companies [27], or state-owned enterprises [28]. Nor do we exclude individuals or governments in the analysis of the shareholders who own equity shares in companies in global economy. ...
... These shareholders with the large traffic volume of equity stakes are governments and American financial institutions BlackRock, Vangaurd, and State Street (i.e., the "Big Three" asset managers). Although previous studies emphasize how the large financial institutions dominate the global capital market, our result reveals that they are actually small relative to political entities, suggesting that these previous claims about financial institutions are overstated [3,4]. In terms of PageRank values, the Chinese government is the largest shareholder (PR = 14.96) with a wide margin to the second. ...
Full-text available
We propose a model and algorithm to measure the amount of influence a shareholder has over the flow of corporate control held by the ultimate owners. Existing models of corporate ownership and control either focus on the ultimate owners' influence or inadequately evaluate the influence possessed by intermediate shareholders in a ownership network. As it extends Network Power Index (NPI) that describes the the power of corporate control possessed by the ultimate owners, our new model, Network Power Flow (NPF), delineates the distribution of ownership influence among shareholders across the network and identifies the channels through which the ultimate owners' corporate control travel through the global shareholding network. Our analysis of NPI and NPF values for 7 million ultimate owners and 16 million shareholders reveals a new landscape of ownership and control in the global shareholding network that remained opaque before.
... In the contemporary global marketplace, the extraordinary power of corporations is widely acknowledged (e.g. Anderson and Cavanagh, 2000;Vitali et al., 2011). The large and successful multinational companies (MNCs), in particular, hold power over their suppliers and possibly even buyers due to their economic volumes (Robinson and Rainbird, 2013). ...
... Even decades ago, Galbraith (1973) noted that many business organisations have transformed from "price takers" to "price makers", a transformation affecting not only the sovereignty of consumers but also the economic system as a whole. These MNCs are found to have both far-reaching opportunities to influence their constellation of network partners (Vitali et al., 2011), and the ability to choose the locations in which they invest and operate (Fuchs and Clapp, 2009). Given their power to also mould lifestyles (Michaelis, 2003) and influence the political and societal arena (Scherer and Palazzo, 2011), they can be seen to be responsible for their business conduct, having both negative duties such as inflicting no harm on their environment and positive duties such as investing organisational resources in shaping a social and institutional setting favourable to sustainability (Macdonald, 2011). ...
Purpose This paper analyses the establishment and evolution of a public oversight body (POB) – the Egyptian Audit Oversight Unit (AOU) – and its implications for local auditing firms and practices. Design/methodology/approach Primary data were gathered from 34 semi-structured interviews (including follow-up ones) between 2014 and 2020. Secondary data was obtained through publicly available documents and internal memos. Drawing on Debord's (1967) Society of the Spectacle, the insights focus on the POB's conception, materialisation and evolution in a context characterised by weak regulatory structures. Findings Through a series of acts, the findings reveal how the AOU first accepted the image of “international best practice” oversight (the “metaphorical”), followed by the construction of the local structure and décor replicating a United States (US) style POB archetype (the “transformational”) by primarily relying on visible processes/procedures. Yet, these mechanisms emphasised the spectacular nature of oversight, with little improvement for practice and limiting itself to “cracking down” on smaller local firms. A final stage (the “performative”) reveals how the AOU seeks to expand its activities beyond its original mandate without challenging the image-driven nature of its oversight. Originality/value The paper offers two key contributions. First, it reveals how actors, through a combination of symbolic and tangible measures, create a new performative reality of public oversight. Second, it advocates Debord's “spectacle” to complement other theoretical lenses, with a view to illuminating the materialisation stages that bridge the gap between proclaimed oversight policies and actual practices (including conscious and unconscious omissions) within a given political economy context.
... Príznačné sú výsledky analýzy vzťahov v sieti 43 060 registrovaných nadnárodných korporácií (TNC -Transnational Corporations), podľa ktorých až 80 % ekonomických tokov ovláda iba 747 vzájomne prepojených korporácií, pričom ich užšie jadro (147 TNC) ovláda 40 % globálneho trhu [119]. Až 75 % tohto jadra predstavujú bankové inštitúcie. ...
Conference Paper
Full-text available
ABSTRAKT Konfrontácia prísľubov udržateľného rozvoja s dvadsiatimi rokmi reality, ktoré uplynuli od konania summitu Zeme v Riu v roku 1992 nedáva veľa dôvodov k optimizmu. Vízie udržateľnej spoločnosti boli deformované pragmatizmom udržateľného rastu, ktorý vedie k zrýchľujúcej sa dezintegrácii biosféry, prehlbovaniu sociálnej erózie a strate ekonomickej sebestačnosti. Namiesto reflexie tejto skutočnosti bezradné a skorumpované vládne a korporátne elity ťahajú štáty po širokej ceste podľa scenára "biznis ako doposiaľ". Výsledkom je nárast hybných síl deštrukčných procesov a ďalší posun k hrane globálneho kolapsu. Preto je čas zamýšľať sa nad alternatívami k tomuto pohybu. Ich spoločným menovateľom je obrat od téz rastu smerom ku koncepcii udržateľnej spoločnosti. Ku kľúčovým kritériám ich konania patrí rešpektovanie ekologických a sociálnych limitov a ľudskej dôstojnosti. Kľúčové slová: udržateľný rozvoj, ekologické limity, ekologická komplexita a integrita, udržateľná spoločnosť ABSTRACT The confrontation of the promises of sustainable development with the twenty years of reality, which passed since the Earth Summit in Rio in 1992 provides no reasons for optimism. Visions of sustainable society have been deformed by pragmatism of sustainable growth leading to accelerated disintegration of the biosphere, deepened social erosion and loss of economic self-sufficiency. Instead of reflecting this reality, the puzzled and corrupted governmental and corporate elites drag the states along the wide road according to the scenario of "business as usual". The result is a growth of the driving forces of destructive processes and a further shift towards the edge of global collapse. Therefore, it is time to think about alternatives to this move. The key criteria of their activities include respect towards ecological and social limits, human dignity and a quality of life. Keywords: sustainable development, ecological limits, ecological complexity and integrity, sustainable society ÚVOD V roku 2012 uplynulo štyridsať rokov odvtedy ako sa v literatúre, konkrétne v časopise The Ecologist, prvý raz objavil pojem udržateľný (sustainable): "Našou úlohou je vytvoriť spoločnosť, ktorá bude udržateľná a ktorá poskytne možnosti plnej spokojnosti pre jej členov. Z definície takejto spoločnosti vyplýva, že nebude závisieť od expanzie, ale od stability" [29]. Podľa autora tohto pojmu, Edwarda Goldsmitha, je totiž zásadným problémom étosu expanzie a s ním spojeného priemyselného spôsobu života ich ekologická a sociálna neudržateľnosť. V tom istom roku boli publikované "Limity rastu" [72], [81], výsledky počítačového modelovania a simulácie vývoja významných globálnych trendov-rastu ľudskej populácie, zabezpečenia výživy, priemyselného rozvoja, využívania prírodných zdrojov a rastu znečistenia. Prognózy modelov Meadowsovho tímu upozornili na riziko globálneho kolapsu, v prípade, ak budeme ignorovať hranice rastu týchto trendov, dané limitmi prírodných zdrojov Zeme. O dvadsať rokov neskôr tí istí autori varovali, že dominantné trendy nás už posúvajú za hranice limitov: "Ľudský svet sa dostal za svoje hranice. Súčasný spôsob života je neudržateľný. Budúcnosť, ak máme byť životaschopní, musí byť cestou návratu, odľahčujúceho zostupu dole, liečenia" [72]. Ako reakcia na výskum environmentálnych problémov, popularizáciu jeho výsledkov (napr. Carsonovej Tichá jar [6]), ale tiež Ehrlichove práce [19]), aj rastúce vnímanie verejnosťou a časťou decíznej sféry sa v 70. rokoch minulého storočia naštartoval bezprecedentný rozvoj medzinárodného environmentálneho práva. V roku 1987 bol publikovaný návrh koncepcie udržateľného rozvoja [122], ktorú na najvyššej medzinárodnej politickej úrovni potvrdili vládni delegáti na Konferencii OSN o životnom prostredí a rozvoji v Riu v roku 1992. Táto koncepcia predstavovala nový prísľub šťastia, spočívajúci v spojení ďalšieho ekonomického rozvoja s ochranou prostredia: "V záujme trvalo udržateľného rozvoja musí ochrana životného prostredia tvoriť nedeliteľnú súčasť procesu rozvoja a nemožno ju chápať oddelene"-zásada č. 4 Deklarácie z Ria [75]. Následný vývoj priniesol početné miestne a regionálne zlepšenia stavu zložiek životného prostredia a iniciatívy rozvíjania miestnej a regionálnej Agendy 21. V roku 2012 Konferencia OSN o udržateľnom rozvoji Rio + 20 schválila dokument "Budúcnosť akú chceme" [113], v ktorom potvrdila koncepciu udržateľného rozvoja, ktorú si už osvojila decízna a podnikateľská sféra, ako aj verejnosť [24]. Ako jeden
... Opportunity 1: Flows over Multilayer Networks. Multilayer dynamics [18,[95][96][97][98][99][100] studies complex systems with numerous interconnected layers or networks, each representing a particular relationship or interaction. Entities (nodes) can be connected over numerous levels, creating rich and diverse connectedness and dynamics. ...
The occurrence of diffusion on a graph is a prevalent and significant phenomenon, as evidenced by the spread of rumors, influenza-like viruses, smart grid failures, and similar events. Comprehending the behaviors of flow is a formidable task, due to the intricate interplay between the distribution of seeds that initiate flow propagation, the propagation model, and the topology of the graph. The study of networks encompasses a diverse range of academic disciplines, including mathematics, physics, social science, and computer science. This interdisciplinary nature of network research is characterized by a high degree of specialization and compartmentalization, and the cooperation facilitated by them is inadequate. From a machine learning standpoint, there is a deficiency in a cohesive platform for assessing algorithms across various domains. One of the primary obstacles to current research in this field is the absence of a comprehensive curated benchmark suite to study the flow behaviors under network scenarios. To address this disparity, we propose the implementation of a novel benchmark suite that encompasses a variety of tasks, baseline models, graph datasets, and evaluation tools. In addition, we present a comprehensive analytical framework that offers a generalized approach to numerous flow-related tasks across diverse domains, serving as a blueprint and roadmap. Drawing upon the outcomes of our empirical investigation, we analyze the advantages and disadvantages of current foundational models, and we underscore potential avenues for further study. The datasets, code, and baseline models have been made available for the public at:
Full-text available
O artigo "Revisitando Lênin: por uma teoria complexa do Estado" procura discutir a atualidade de seu pensamento para a sociologia política, naquilo que poderia ser chamado de "nova leitura de Lênin".
This article studies human rights due diligence by private corporate creditors in the context of sovereign debt restructurings. First, the legal bases of this specific due diligence are presented and systematized. Then, by providing empirical statistical evidence, the article analyses whether haircuts applied by creditors across countries regularly consider the social and economic human rights situation of the debtor countries in question, as part of creditors’ due diligence. Also, the main characteristics of bond markets that contribute to understanding the asymmetric power relationship between private lenders and sovereign borrowers are described. Finally, Argentina’s latest debt restructurings are studied in depth to determine whether human rights were taken into account when agreeing on the size of haircuts. From quantitative and qualitative data, this article concludes that the haircuts agreed by creditors are regularly not sensitive to the social and economic human rights situation of debtor populations or to the impact that debt agreements could have on them.
Full-text available
Free zones and their impact on economic growth in developing countries
Full-text available
Forging sustainable development must explicitly commit to gender issues in the management of enterprises in Africa. However, advancing both gender equality and creating sustainable pathways present pressing problems. This book chapter examines the need to address gender equality and sustainable development jointly and outlines the moral, ethical, and practical justifications. It was found that the sustainability issues in Africa include overusing and non-renewal of our natural resources (depletion of natural resources), environmental degradation, and high-income inequality. Gender inequality in Africa was found in work and industrialisation, demographics and procreation, agriculture and food production, water, sanitation, and energy, among others. The main drivers of gender inequality in Africa were revealed as unequal access to social protection, and economic, and legal power. Other factors that were found to prevent gender equality and sustainability were uneven distribution of the costs of extreme poverty, education, skill disparities, and gender stereotypes. Realistic solutions suggested are fostering the development of women as they formed the majority of a marginalised group and improving equal access to school, and leadership positions, and, abolishing cultural practices that discriminate against women.
Full-text available
We present a methodology to extract the backbone of complex networks based on the weight and direction of links, as well as on nontopological properties of nodes. We show how the methodology can be applied in general to networks in which mass or energy is flowing along the links. In particular, the procedure enables us to address important questions in economics, namely, how control and wealth are structured and concentrated across national markets. We report on the first cross-country investigation of ownership networks, focusing on the stock markets of 48 countries around the world. On the one hand, our analysis confirms results expected on the basis of the literature on corporate control, namely, that in Anglo-Saxon countries control tends to be dispersed among numerous shareholders. On the other hand, it also reveals that in the same countries, control is found to be highly concentrated at the global level, namely, lying in the hands of very few important shareholders. Interestingly, the exact opposite is observed for European countries. These results have previously not been reported as they are not observable without the kind of network analysis developed here.
Full-text available
The boards of directors of the largest corporations of a country together with the directors form a dense bipartite network. The board network consists of boards connected through common directors. The director network is obtained taking the directors as nodes, and a membership in the same board as a link. These networks are involved in the decision making processes relevant to the macro-economy of a country. We present an extensive and comparative analysis of the statistical properties of the board network and the director network for the first 1000 US corporations ranked by revenue (Fortune 1000) in the year 1999 and for the corporations of the Italian Stock Market. We find several common statistical properties across the data sets, despite the fact that they refer to different years and countries. This suggests an underlying universal formation mechanism which is not captured in a satisfactory way by the existent network models. In particular we find that all the considered networks are Small Worlds, assortative, highly clustered and dominated by a giant component. Several other properties are examined. The presence of a lobby in a board, a feature relevant to decision making dynamics, turns out to be a macroscopic phenomenon in all the data sets.
Full-text available
This paper argues that efficiency-oriented approaches to corporate governance and law are limited in their ability to explain the politics of corporate control and, in particular, the rise of shareholder activism. Politics, like other social action, is embedded in social structures that influence whether, when, and how collective action is accomplished by interest groups. We use a social movement framework to explain the changing capacities of shareholders and managers-as members of classes-to act on their interests in control at the firm, state, and federal level. We illustrate this framework by showing how activist shareholders increased their influence in corporate governance in the early 1990s.
This study analyzes organization of economic activity within and between markets and hierarchies. It considers the transaction to be the ultimate unit of microeconomic analysis, and defines hierarchical transactions as ones for which a single administrative entity spans both sides of the transaction, some form of subordination prevails and, typically, consolidated ownership obtains. Discusses the advantages of the transactional approach by examining three issues: price discrimination, insurance, and vertical integration. Develops the concept of the organizational failure framework, and demonstrates why it is always the combination of human with environmental factors, not either taken by itself, that causes transactional problems. The study also describes each of the transactional relations of interest, and presents the advantages of internal organization with respect to the transactional condition. The analysis explains why primary work groups of the peer group and simple hierarchy types arise. The same transactional factor which impede autonomous contracting between individuals also impede market exchange between technologically separable work groups. Peer groups can be understood as an internal organizational response to the frictions of intermediate product markets, while conglomerate organization can be seen as a response to failures in the capital market. In both contexts, the same human factors, such as bounded rationality and opportunism, occur. Examines the reasons for and properties of the employment relation, which is commonly associated with voluntary subordination. The analysis attempts better to assess the employment relation in circumstances where workers acquire, during the course of the employment, significant job-specific skills and knowledge. The study compares alternative labor-contracting modes and demonstrates that collective organization is helpful in enhancing the acquisition of idiosyncratic knowledge and skills by the work force. The study then examines more complex structures -- the movement from simple hierarchies to the vertical integration of firms, then multidivisional structures, conglomerates, monopolies and oligopolies. Discusses the market structure in relation to technical and organizational innovation. The study proposes a systems approach to the innovation process. Its purpose is to permit the realization of the distinctive advantages of both small and large firms which apply at different stages of the innovation process. The analysis also examines the relation of organizational innovation to technological innovation. (AT)
This paper is a review of the post-war literature on income distribution and development. It argues that the literature has cycled from one consensus to another, responding to emerging policy issues and new analysis. On the basis of the review, the paper identifies five areas that will command the attention of analysts in the coming two decades: (i) country case studies rather than cross-country regression analysis; (ii) the phenomenon of increasing inequality; (iii) different levels of disaggregation, particularly distribution between broadly defined groups; (iv) intra-household allocation; and (v) alternative modes of redistribution in face of inequality increasing tendencies.
Interpersonal links in sociometric structures are interpreted as input-output channels for the transmission of influence. Magnitudes of influence flow generate objective indices of cohesiveness, which serve as the basis for the identification of cliques. This stands in contrast to the factor-analytic rationale of similarity of incoming and outgoing choice patterns. The model departs from the classical sociometric tradition by permitting links to have fractional and/or negative strength, and by taking simultaneous account of direct and indirect linkages. The cohesiveness index is useful for inter-group and diachronic comparisons of structures.
The globalization of financial markets and the concomitant restructuring decisions of firms challenge the historical legacy of national systems of governance. German corporate ownership patterns and restructuring events in the 1990's are examined here in this light. The results show that ownership links among German firms constitute a "small world" that has consequences for understanding mergers and acquisitions. Ownership links form closely-knit clusters of firms that are nonetheless highly connected across the network as a whole. Restructuring events fall squarely in the center of this structure. Despite increasing global competition, the German small world tends to replicate itself. To illustrate this robustness, potential disruptions to the observed German network are simulated. This simulation shows that the properties of the small world remain intact even when ownership ties are changed. These findings suggest that a more global economy in Germany need not lead to the dissolution of the ownership structure, but rather may be associated with a deepening of network ties.