The network theory is not a new approach in the accademic economic  studies. In addition to its applications in the industrial organization field and in particular in the investigations on the relations between the employees of a company, other studies have analyzed the shareholding relations and the consequent corporate network established between companies.

On this line of research, a  study “The Network of Global Corporate Control”, published in 2012 by three scientists (Stefania Vitali, Stefano Battiston and James Glattfelder) from ETH Zurich in Switzerland dell’ETH, studies the linkages of control among these companies, where control is shareholding and ownership.

NGCC

The work revealed a core of about 1300 companies with interlocking ownerships. Each of these companies had ties to two or more other companies, and on average they were connected to 20. What’s more, although they represented 20 per cent of global operating revenues, these companies appeared to collectively own through their shares the majority of the world’s large blue chip and manufacturing firms. Moreover, they discovered that global corporate control has a distinct bow-tie shape, with a dominant core of 147 firms radiating out from the middle. Each of these 147 own interlocking stakes of one another and together they control 40% of the wealth in the network.

The study has been performed by applying the network theory techniques from the complex network science approach, using insights from physics, mathematics, statistics and economic.

Read the full article published in the scientific journal PlosOne: The Network of Global Corporate Control.

The Network of Global Corporate Control