Abstract
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.
Highlights
A common intuition among scholars and in the media sees the global economy as being dominated by a handful of powerful transnational corporations (TNCs)
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
We are interested in the true global ownership network and many TNCs are not listed companies
Summary
A common intuition among scholars and in the media sees the global economy as being dominated by a handful of powerful transnational corporations (TNCs). This has not been confirmed or rejected with explicit numbers. 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 analyzed ownership networks [10,11], but has neglected the structure of control at a global level. This was never performed before and it is the aim of the present work
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