2019 |
Babic, M Let’s talk about the interregnum: Gramsci and the crisis of the Liberal World Order Journal Article Forthcoming International Affairs, 0 (0), pp. 0, Forthcoming. Abstract | Links | BibTeX | Tags: crisis, Globalization, Gramsci, international political economy, International Politics, international relations, liberal world order @article{Babic2019e, title = {Let’s talk about the interregnum: Gramsci and the crisis of the Liberal World Order}, author = {M Babic}, url = {https://milanbabic.com/wp-content/uploads/2019/11/Manuscript_AO.pdf}, year = {2019}, date = {2019-11-11}, journal = {International Affairs}, volume = {0}, number = {0}, pages = {0}, abstract = {The liberal international order (LIO) is in crisis. Numerous publications, debates and events have made it time and again clear that we are in the midst of a grand transformation of world order. While most contributions focus either on what is slowly dying (the LIO) or what might come next (China, multipolarity, chaos?), there is less analytical engagement with what lies in between those two phases of world order. Under the assumption that this period could last years or even decades, a set of analytical tools to understand this interregnum is urgently needed. This paper proposes an analytical framework that builds on Gramscian crisis concepts that will help understanding the current crisis of the LIO in a more systematic way. It adds to a gap in the literature on changing world order by elaborating three Gramsci-inspired crisis characteristics - processuality, organicity and morbidity - that sketch the current crisis landscape in a systematic way. Building on this framework, the paper suggests different empirical entry points to the study of the crisis of the LIO and calls for a research agenda that takes this crisis seriously as a distinct period of changing world orders.}, keywords = {crisis, Globalization, Gramsci, international political economy, International Politics, international relations, liberal world order}, pubstate = {forthcoming}, tppubtype = {article} } The liberal international order (LIO) is in crisis. Numerous publications, debates and events have made it time and again clear that we are in the midst of a grand transformation of world order. While most contributions focus either on what is slowly dying (the LIO) or what might come next (China, multipolarity, chaos?), there is less analytical engagement with what lies in between those two phases of world order. Under the assumption that this period could last years or even decades, a set of analytical tools to understand this interregnum is urgently needed. This paper proposes an analytical framework that builds on Gramscian crisis concepts that will help understanding the current crisis of the LIO in a more systematic way. It adds to a gap in the literature on changing world order by elaborating three Gramsci-inspired crisis characteristics - processuality, organicity and morbidity - that sketch the current crisis landscape in a systematic way. Building on this framework, the paper suggests different empirical entry points to the study of the crisis of the LIO and calls for a research agenda that takes this crisis seriously as a distinct period of changing world orders. |
Babic, M; Garcia-Bernardo, J; Heemskerk, E M The rise of transnational state capital: state-led foreign investment in the 21st century Journal Article Review of International Political Economy, 2019. Abstract | Links | BibTeX | Tags: corporate power, foreign direct investment, Globalization, Ownership, state capitalism @article{Babic2019db, title = {The rise of transnational state capital: state-led foreign investment in the 21st century}, author = {M Babic and J Garcia-Bernardo and E M Heemskerk}, url = {https://www.tandfonline.com/doi/full/10.1080/09692290.2019.1665084}, doi = {https://doi.org/10.1080/09692290.2019.1665084}, year = {2019}, date = {2019-10-07}, journal = {Review of International Political Economy}, abstract = {Cross-border state-led investment is a recently rising, but understudied phenomenon of the global political economy. Existing research employs an anecdotal and case-oriented perspective that does not engage in a systemic, large-scale analysis of this rise of transnational state investment and its consequences for the transformation of state power in 21st century capitalism. We take a first step at filling this gap and offer two original contributions: Conceptually, we operationalize transnational foreign state-led investment on the basis of weighted ownership ties. These state capital ties are created by states as investors in corporations around the world. Empirically, we demonstrate our approach by setting up and analyzing the largest dataset on transnational state capital up to date. We show which different outward strategies states as owners employ and classify states according to their relative positions within the global network of transnational state capital. Our results illustrate a crucial aspect of the ongoing transformation of state power and sovereignty within globalization and we demonstrate how a careful and data-driven approach is able to identify different pathways and dimensions of this transformation.}, keywords = {corporate power, foreign direct investment, Globalization, Ownership, state capitalism}, pubstate = {published}, tppubtype = {article} } Cross-border state-led investment is a recently rising, but understudied phenomenon of the global political economy. Existing research employs an anecdotal and case-oriented perspective that does not engage in a systemic, large-scale analysis of this rise of transnational state investment and its consequences for the transformation of state power in 21st century capitalism. We take a first step at filling this gap and offer two original contributions: Conceptually, we operationalize transnational foreign state-led investment on the basis of weighted ownership ties. These state capital ties are created by states as investors in corporations around the world. Empirically, we demonstrate our approach by setting up and analyzing the largest dataset on transnational state capital up to date. We show which different outward strategies states as owners employ and classify states according to their relative positions within the global network of transnational state capital. Our results illustrate a crucial aspect of the ongoing transformation of state power and sovereignty within globalization and we demonstrate how a careful and data-driven approach is able to identify different pathways and dimensions of this transformation. |
Pisani N; Garcia-Bernardo, J; Heemskerk, E M Does it Pay to be a Multinational? A Large‐Sample, Cross‐National Replication Assessing the Multinationality‐Performance Relationship Journal Article Strategic Management Journal, pp. 1-33, 2019. Abstract | Links | BibTeX | Tags: firm performance, multinationality, panel data, replication, S-curve @article{Garcia2019b, title = {Does it Pay to be a Multinational? A Large‐Sample, Cross‐National Replication Assessing the Multinationality‐Performance Relationship}, author = {Pisani, N; Garcia-Bernardo, J and E M Heemskerk}, url = {https://onlinelibrary.wiley.com/doi/abs/10.1002/smj.3087}, doi = {https://doi.org/10.1002/smj.3087}, year = {2019}, date = {2019-09-11}, journal = {Strategic Management Journal}, pages = {1-33}, abstract = {Does it pay to be a multinational? Despite decades of empirical research, we still do not know. We undertake a large‐sample, cross‐national replication of Lu and Beamish (2004) and Berry and Kaul's (2016) works to examine whether the multinationality‐performance relationship is S‐shaped in a 2009–2016 panel of 889,865 firm‐year observations. Using a two‐stage least squares fixed‐effects model that accounts for endogeneity on a subsample of 32,835 multinationals from 64 countries, we find no evidence of an S‐shaped relationship; nor do we see it in any of the single‐country contexts. Our results show no evidence of any within‐firm effect of multinationality on performance, highlighting the need for more contextually‐grounded research focused on explaining between‐firm effects to advance our theoretical and empirical understanding of the multinationality‐performance relationship.}, keywords = {firm performance, multinationality, panel data, replication, S-curve}, pubstate = {published}, tppubtype = {article} } Does it pay to be a multinational? Despite decades of empirical research, we still do not know. We undertake a large‐sample, cross‐national replication of Lu and Beamish (2004) and Berry and Kaul's (2016) works to examine whether the multinationality‐performance relationship is S‐shaped in a 2009–2016 panel of 889,865 firm‐year observations. Using a two‐stage least squares fixed‐effects model that accounts for endogeneity on a subsample of 32,835 multinationals from 64 countries, we find no evidence of an S‐shaped relationship; nor do we see it in any of the single‐country contexts. Our results show no evidence of any within‐firm effect of multinationality on performance, highlighting the need for more contextually‐grounded research focused on explaining between‐firm effects to advance our theoretical and empirical understanding of the multinationality‐performance relationship. |
Babic, M Why Globalization was Not the End of State Power Online Global Policy Journal 2019. Abstract | Links | BibTeX | Tags: Globalization, International Politics, State Power @online{Babic2019d, title = {Why Globalization was Not the End of State Power}, author = {M Babic}, url = {https://www.globalpolicyjournal.com/blog/11/09/2019/why-globalization-was-not-end-state-power}, year = {2019}, date = {2019-09-11}, organization = {Global Policy Journal}, abstract = {Milan Babic argues that states’ strategic adaptation to neoliberal globalization grants them new powers in international politics.}, keywords = {Globalization, International Politics, State Power}, pubstate = {published}, tppubtype = {online} } Milan Babic argues that states’ strategic adaptation to neoliberal globalization grants them new powers in international politics. |
Babic, M Reclaiming the commons through state ownership? Maybe not Online Open Democracy 2019. Abstract | Links | BibTeX | Tags: corporate power, corporations, Globalization, state capitalism, State ownership @online{Babic2019c, title = {Reclaiming the commons through state ownership? Maybe not}, author = {M Babic}, url = {https://www.opendemocracy.net/en/oureconomy/reclaiming-commons-through-state-ownership-maybe-not/}, year = {2019}, date = {2019-07-30}, organization = {Open Democracy}, abstract = { Is state ownership really a viable alternative for a post-neoliberal, more inclusive and emancipatory global economy? While this is an open question, I lay out three arguments in the following that challenge this emancipatory promise - with the hope of stimulating a discussion about the nature of the role of state ownership in a globalized economy.}, keywords = {corporate power, corporations, Globalization, state capitalism, State ownership}, pubstate = {published}, tppubtype = {online} } Is state ownership really a viable alternative for a post-neoliberal, more inclusive and emancipatory global economy? While this is an open question, I lay out three arguments in the following that challenge this emancipatory promise - with the hope of stimulating a discussion about the nature of the role of state ownership in a globalized economy. |
Janssen, Thomas Chinese Firms in the Belt and Road Initiative: Building a Passive Revolution Masters Thesis 2019. Abstract | Links | BibTeX | Tags: Belt and Road, China, corporate power, Ownership, state capitalism, State ownership, states @mastersthesis{Janssen2019, title = {Chinese Firms in the Belt and Road Initiative: Building a Passive Revolution}, author = {Janssen, Thomas}, url = {https://corpnet.uva.nl/thesis_janssen_11054603/}, year = {2019}, date = {2019-07-12}, abstract = {The Belt and Road Initiative is in crisis because many participants are worried about dept trap diplomacy and not sharing equally in the benefits. How can it be then that Chinese companies are still receiving the vast majority of Belt and Road construction contracts? This thesis seeks to contribute to an answer to this question. By invoking the concept of passive revolution as a theoretical lens, it argues that the Chinese elite is more likely to favor contract allocation to companies that are more controlled by it, especially in economic sectors that are more important to their interests. Four categories of companies are constructed on a continuum from most to least central Party controlled. Contracts are split among three sectors that are, domestically, tightly regulated (‘strategic’), less regulated (‘pillar’) and least regulated (‘normal’). The thesis finds that centrally controlled state-owned enterprises account for over 90% of Chinese-funded Belt and Road construction contracts. The Chinese political elite is found to be even more eager to control the Belt and Road than its domestic economy. Future research will have to take stock of, and further examine, why Chinese state-owned companies feature so prominently in the Belt and Road.}, keywords = {Belt and Road, China, corporate power, Ownership, state capitalism, State ownership, states}, pubstate = {published}, tppubtype = {mastersthesis} } The Belt and Road Initiative is in crisis because many participants are worried about dept trap diplomacy and not sharing equally in the benefits. How can it be then that Chinese companies are still receiving the vast majority of Belt and Road construction contracts? This thesis seeks to contribute to an answer to this question. By invoking the concept of passive revolution as a theoretical lens, it argues that the Chinese elite is more likely to favor contract allocation to companies that are more controlled by it, especially in economic sectors that are more important to their interests. Four categories of companies are constructed on a continuum from most to least central Party controlled. Contracts are split among three sectors that are, domestically, tightly regulated (‘strategic’), less regulated (‘pillar’) and least regulated (‘normal’). The thesis finds that centrally controlled state-owned enterprises account for over 90% of Chinese-funded Belt and Road construction contracts. The Chinese political elite is found to be even more eager to control the Belt and Road than its domestic economy. Future research will have to take stock of, and further examine, why Chinese state-owned companies feature so prominently in the Belt and Road. |
Vermeij, Koen The offshore state: A first large-scale inquiry into the state’s utilization of offshore constructs Masters Thesis 2019. Abstract | Links | BibTeX | Tags: corporate structures, offshore, offshore construct, offshore financial centres, offshore jurisdictions, state capitalism, State ownership, transnational state investment @mastersthesis{Vermeij2019, title = {The offshore state: A first large-scale inquiry into the state’s utilization of offshore constructs}, author = {Koen Vermeij}, url = {https://corpnet.uva.nl/masters-thesis-koen-vermeij-2/}, year = {2019}, date = {2019-07-11}, abstract = {As a consequence of globalization and financialization, it has become common practice for transnational corporations to develop offshore constructs in order to maximize income and minimize costs and accountability. Offshore constructs allow companies to transfer financial resources across borders to the most advantageous places. The common conception is that this puts states in a game of economic competition. The state’s strategy to deal with this situation is to lower regulatory and fiscal standards in order to develop an inviting destination for capital. This way they facilitate the use of offshore constructs. However, piecemeal evidence suggests that states do not only facilitate offshore constructs, but that they also actively utilize them as owners of capital themselves. This research uses large-scale quantitative data on ownership relations to develop a global image of state’s offshore constructs. The findings indicate that states indeed use offshore constructs on a considerable scale, but that 90% of them belongs to a group of 20 states. It is the first large-scale evidence for the state’s usage of offshore constructs.}, keywords = {corporate structures, offshore, offshore construct, offshore financial centres, offshore jurisdictions, state capitalism, State ownership, transnational state investment}, pubstate = {published}, tppubtype = {mastersthesis} } As a consequence of globalization and financialization, it has become common practice for transnational corporations to develop offshore constructs in order to maximize income and minimize costs and accountability. Offshore constructs allow companies to transfer financial resources across borders to the most advantageous places. The common conception is that this puts states in a game of economic competition. The state’s strategy to deal with this situation is to lower regulatory and fiscal standards in order to develop an inviting destination for capital. This way they facilitate the use of offshore constructs. However, piecemeal evidence suggests that states do not only facilitate offshore constructs, but that they also actively utilize them as owners of capital themselves. This research uses large-scale quantitative data on ownership relations to develop a global image of state’s offshore constructs. The findings indicate that states indeed use offshore constructs on a considerable scale, but that 90% of them belongs to a group of 20 states. It is the first large-scale evidence for the state’s usage of offshore constructs. |
Thijssen, N M Y Stewardship in the age of the new permanent owners Masters Thesis 2019. Abstract | Links | BibTeX | Tags: active ownership, engagement, ESG, ownership concentration, stewardship, The Big Three @mastersthesis{Thijssen2019, title = {Stewardship in the age of the new permanent owners}, author = {Thijssen, N. M. Y.}, url = {https://corpnet.uva.nl/wp-content/uploads/Thesis-Nele-Thijssen-Final-.pdf}, year = {2019}, date = {2019-07-08}, abstract = {The rise of passive investing has led to the concentration of ownership in the hands of ‘The Big Three’, major asset managers that dominate the passive asset industry: BlackRock, Vanguard and State Street. This study analyses how the Big Three approach investment stewardship and what incentivises them to influence their investee companies to integrate the principles of environment, social and governance (ESG) responsibility. Based on expert interviews three central trends can be identified that contribute to an increase of the stewardship activities of the Big Three: increased investor appetite, growing regulation and the materialisation of ESG principles. Both private and public investors increasingly demand a growing ESG related stewardship role of the Big Three. Their inability to sell shares puts the Big Three in a ‘partner position’ with their investee companies, which contributes to the adoptation of an enhanced stewardship role. The stewardship strategy of the Big Three consists of three elements: monitoring, voting and engagement. Their engagement strategy can be characterised as event-driven with a focus on severe ESG underperformers. The Big Three are inclined to approach their investee companies based on a fundamentally positive thrust and adhere to a long-term perspective on the improvement of their ESG performance. However, the Big Three remain hesitant, potentially due to a fear for a regulatory backlash, to fully utilise their influential ownership position to push their investee companies to integrate ESG principles.}, keywords = {active ownership, engagement, ESG, ownership concentration, stewardship, The Big Three}, pubstate = {published}, tppubtype = {mastersthesis} } The rise of passive investing has led to the concentration of ownership in the hands of ‘The Big Three’, major asset managers that dominate the passive asset industry: BlackRock, Vanguard and State Street. This study analyses how the Big Three approach investment stewardship and what incentivises them to influence their investee companies to integrate the principles of environment, social and governance (ESG) responsibility. Based on expert interviews three central trends can be identified that contribute to an increase of the stewardship activities of the Big Three: increased investor appetite, growing regulation and the materialisation of ESG principles. Both private and public investors increasingly demand a growing ESG related stewardship role of the Big Three. Their inability to sell shares puts the Big Three in a ‘partner position’ with their investee companies, which contributes to the adoptation of an enhanced stewardship role. The stewardship strategy of the Big Three consists of three elements: monitoring, voting and engagement. Their engagement strategy can be characterised as event-driven with a focus on severe ESG underperformers. The Big Three are inclined to approach their investee companies based on a fundamentally positive thrust and adhere to a long-term perspective on the improvement of their ESG performance. However, the Big Three remain hesitant, potentially due to a fear for a regulatory backlash, to fully utilise their influential ownership position to push their investee companies to integrate ESG principles. |
Hansen, D S Investigating the effect of firm financialization on effective tax rates Masters Thesis 2019. Abstract | Links | BibTeX | Tags: base erosion, effective tax rates, Financialization, intangible assets @mastersthesis{Hansen2019b, title = {Investigating the effect of firm financialization on effective tax rates}, author = {Hansen, D. S.}, url = {https://corpnet.uva.nl/wp-content/uploads/dsh_thesis-4.pdf}, year = {2019}, date = {2019-07-03}, abstract = {This thesis discusses the effects of financialization, along with the firm-level driversproviding incentive for firms to engage this process. It presents argument and evi-dence for firms using the financialization of productive capital to lower their effectivetax rate by eroding their taxable base. Empirically, this is done by designating fi-nancialization as the increasing economic importance of intangible assets at thelevel of the firm. Based on a large sample of approximately 4 million firms fromthe Orbis database, the reported results are robust against controlling for firm sizealong with other relevant firm-level aspects, firm fixed effects and varying countrycharacteristics.}, keywords = {base erosion, effective tax rates, Financialization, intangible assets}, pubstate = {published}, tppubtype = {mastersthesis} } This thesis discusses the effects of financialization, along with the firm-level driversproviding incentive for firms to engage this process. It presents argument and evi-dence for firms using the financialization of productive capital to lower their effectivetax rate by eroding their taxable base. Empirically, this is done by designating fi-nancialization as the increasing economic importance of intangible assets at thelevel of the firm. Based on a large sample of approximately 4 million firms fromthe Orbis database, the reported results are robust against controlling for firm sizealong with other relevant firm-level aspects, firm fixed effects and varying countrycharacteristics. |
Van Straalen, L The Resilient European Corporate Community: Evidence from the European network of interlocking directorates between 2005 and 2018 Masters Thesis 2019. Abstract | Links | BibTeX | Tags: board of directors, business elites, corporate governance, Eurocrisis, European Union, interlocking directorates, networks @mastersthesis{vanStraalen2019, title = {The Resilient European Corporate Community: Evidence from the European network of interlocking directorates between 2005 and 2018}, author = {Van Straalen, L.}, url = {https://corpnet.uva.nl/wp-content/uploads/Van-Straalen-L.-Bachelor-Thesis.pdf}, year = {2019}, date = {2019-06-03}, abstract = {The European network of interlocking directorates is an important backbone of European integration, connecting the transnational European corporate elite. In this thesis, I analyzed the development of the European IDN between 2005, 2010, 2015 and 2018 with two new datasets. The findings show that after a period of growth between 2005 and 2010, the European corporate network decreased in connectivity during the financial crisis. After 2015, the European IDN started growing again, proving its resilience. This study of the development of the European IDN, its core of firms and directors and the first effects of Brexit on the British connectivity to the European corporate elite, shows that with Euroscepticism and nationalism on the rise, the European corporate community might yet again prove to be of great importance in influencing the future of the European Union.}, keywords = {board of directors, business elites, corporate governance, Eurocrisis, European Union, interlocking directorates, networks}, pubstate = {published}, tppubtype = {mastersthesis} } The European network of interlocking directorates is an important backbone of European integration, connecting the transnational European corporate elite. In this thesis, I analyzed the development of the European IDN between 2005, 2010, 2015 and 2018 with two new datasets. The findings show that after a period of growth between 2005 and 2010, the European corporate network decreased in connectivity during the financial crisis. After 2015, the European IDN started growing again, proving its resilience. This study of the development of the European IDN, its core of firms and directors and the first effects of Brexit on the British connectivity to the European corporate elite, shows that with Euroscepticism and nationalism on the rise, the European corporate community might yet again prove to be of great importance in influencing the future of the European Union. |
Babic, M Stabilisierung, Vertiefung und Konsolidierung der Economic Governance: Elitenstrategien in der europäischen Krise Book Chapter pp. 109-138, Springer VS, Wiesbaden, 2019, ISBN: 2625-8749. Abstract | Links | BibTeX | Tags: capitalism, class, elites, ERT, europe, interlocks @inbook{Babic2019b, title = {Stabilisierung, Vertiefung und Konsolidierung der Economic Governance: Elitenstrategien in der europäischen Krise}, author = {M Babic}, url = {https://doi.org/10.1007/978-3-658-25037-9_5}, doi = {https://doi.org/10.1007/978-3-658-25037-9_5}, isbn = {2625-8749}, year = {2019}, date = {2019-05-15}, pages = {109-138}, publisher = {Springer VS}, address = {Wiesbaden}, series = {Neue Segel, alter Kurs? Die Eurokrise und ihre Folgen für das europäische Wirtschaftsregieren}, abstract = {Existing scholarship showed that European economic elites were crucially involved in the creation and design of both, the European integration path in general as well as a neoliberally shaped economic governance in specific. The European financial and debt crisis imperiled this integration project and its neoliberal course. What does this crisis and its induced transformations mean for the strategic outlook of the European economic elites? In order to answer this question, this article sheds light on the different crisis phases from the perspective of these actors and their strategic decision-making vis-à-vis the crisis. These strategic positions are elaborated from publications of the European Round Table of Industrialists (ERT) as the central organization forum of the European economic elite and are embedded in the overall crisis dynamics. I show how the strategic outlook of the ERT changes in different crisis phases from a stabilization of the economic governance (2007-2009), its deepening (2009-2012) to its consolidation in the third phase (from 2013 onwards). I close by assessing that this consolidation of the neoliberal economic governance could remain only a temporary fix, not being able to calm the growing resistance against a further neoliberalization of the economic governance from both sides of the political spectrum and hence result in a break-up of the integration project itself in the medium run.}, keywords = {capitalism, class, elites, ERT, europe, interlocks}, pubstate = {published}, tppubtype = {inbook} } Existing scholarship showed that European economic elites were crucially involved in the creation and design of both, the European integration path in general as well as a neoliberally shaped economic governance in specific. The European financial and debt crisis imperiled this integration project and its neoliberal course. What does this crisis and its induced transformations mean for the strategic outlook of the European economic elites? In order to answer this question, this article sheds light on the different crisis phases from the perspective of these actors and their strategic decision-making vis-à-vis the crisis. These strategic positions are elaborated from publications of the European Round Table of Industrialists (ERT) as the central organization forum of the European economic elite and are embedded in the overall crisis dynamics. I show how the strategic outlook of the ERT changes in different crisis phases from a stabilization of the economic governance (2007-2009), its deepening (2009-2012) to its consolidation in the third phase (from 2013 onwards). I close by assessing that this consolidation of the neoliberal economic governance could remain only a temporary fix, not being able to calm the growing resistance against a further neoliberalization of the economic governance from both sides of the political spectrum and hence result in a break-up of the integration project itself in the medium run. |
2018 |
Reurink, A; Garcia-Bernardo, J Competing with whom? For what? And how? The great fragmentation of the firm, FDI attraction profiles, and the structure of international tax competition in the European Union Journal Article Forthcoming SocArXiv-preprint, Forthcoming. Abstract | Links | BibTeX | Tags: foreign direct investment, tax competition @article{reurinkgarcia2019, title = {Competing with whom? For what? And how? The great fragmentation of the firm, FDI attraction profiles, and the structure of international tax competition in the European Union}, author = {A Reurink and J Garcia-Bernardo }, url = {https://osf.io/preprints/socarxiv/7ugbr}, doi = {https://doi.org/10.31235/osf.io/7ugbr}, year = {2018}, date = {2018-12-19}, journal = {SocArXiv-preprint}, abstract = {International tax competition is generally framed as states competing for foreign direct investment (FDI), and analyses of the phenomenon draw heavily on FDI statistics. In and of themselves, however, FDI statistics are merely a quantification of the value of investment projects and tell us little about the heterogeneity of these projects and the distinct patterns of competitive dynamics between countries they generate. In this article, we create a more sophisticated understanding of international tax competition by pointing out its variegated nature. To do so, we introduce the notion of the “great fragmentation of the firm” to distinguish between five categories of FDI: manufacturing affiliates, shared service centers, R&D facilities, intermediate holding companies and top holding companies. Using a novel combination of firm-level and country-level data, we identify for each of these different categories of FDI which European Union member states are most successful in attracting it, what macro-institutional and tax arrangements they use to do so, and what benefits they receive from it in terms of tax revenues and employment creation. In this way we were able to identify five distinct FDI attraction profiles and show that, rather than being a game of all against all, tax competition in the European Union increasingly takes place amongst subsets of countries that compete for similar categories of FDI.}, keywords = {foreign direct investment, tax competition}, pubstate = {forthcoming}, tppubtype = {article} } International tax competition is generally framed as states competing for foreign direct investment (FDI), and analyses of the phenomenon draw heavily on FDI statistics. In and of themselves, however, FDI statistics are merely a quantification of the value of investment projects and tell us little about the heterogeneity of these projects and the distinct patterns of competitive dynamics between countries they generate. In this article, we create a more sophisticated understanding of international tax competition by pointing out its variegated nature. To do so, we introduce the notion of the “great fragmentation of the firm” to distinguish between five categories of FDI: manufacturing affiliates, shared service centers, R&D facilities, intermediate holding companies and top holding companies. Using a novel combination of firm-level and country-level data, we identify for each of these different categories of FDI which European Union member states are most successful in attracting it, what macro-institutional and tax arrangements they use to do so, and what benefits they receive from it in terms of tax revenues and employment creation. In this way we were able to identify five distinct FDI attraction profiles and show that, rather than being a game of all against all, tax competition in the European Union increasingly takes place amongst subsets of countries that compete for similar categories of FDI. |
Takes, F W; Kosters, W A; Witte, B; Heemskerk, E M Multiplex network motifs as building blocks of corporate networks Journal Article Applied Network Science, Springer, 3 (39), pp. 1-22, 2018. Abstract | Links | BibTeX | Tags: corporate ownership, multiplex corporate networks, network motifs @article{Takes2018, title = {Multiplex network motifs as building blocks of corporate networks}, author = {F W Takes and W A Kosters and B Witte and E M Heemskerk}, url = {https://appliednetsci.springeropen.com/track/pdf/10.1007/s41109-018-0094-z}, doi = {doi:10.1007/s41109-018-0094-z}, year = {2018}, date = {2018-12-14}, journal = {Applied Network Science, Springer}, volume = {3}, number = {39}, pages = {1-22}, abstract = {In corporate networks, firms are connected through links of corporate ownership and shared directors, connecting the control over major economic actors in our economies in meaningful and consequential ways. Most research thus far focused on the connectedness of firms as a result of one particular link type, analyzing node-specific metrics or global network-based methods to gain insights in the modelled corporate system. In this paper, we aim to understand multiplex corporate networks with multiple types of connections, specifically investigating the network’s essential building blocks: multiplex network motifs. Motifs, which are small subgraph patterns occurring at significantly higher frequencies than in similar random networks, have demonstrated their usefulness in understanding the structure of many types of real-world networks. However, detecting motifs in multiplex networks is nontrivial for two reasons. First of all, there are no out-of-the-box subgraph enumeration algorithms for multiplex networks. Second, existing null models to test network motif significance, are unable to incorporate the interlayer dependencies in the multiplex network. We solve these two issues by introducing a layer encoding algorithm that incorporates the multiplex aspect in the subgraph enumeration phase. In addition, we propose a null model that is able to preserve the interlayer connectedness, while taking into account that one of the link types is actually the result of a projection of an underlying bipartite network. The experimental section considers the corporate network of Germany, in which tens of thousands of firms are connected through several hundred thousand links. We demonstrate how incorporating the multiplex aspect in motif detection is able to reveal new insights that could not be obtained by studying only one type of relationship. In a general sense, the motifs reflect known corporate governance practices related to the monitoring of investments and the concentration of ownership. A substantial fraction of the discovered motifs is typical for an industrialized country such as Germany, whereas others seem specific for certain economic sectors. Interestingly, we find that motifs involving financial firms are over-represented amongst the larger and more complex motifs. This demonstrates the prominent role of the financial sector in Germany’s largely industry-oriented corporate network.}, keywords = {corporate ownership, multiplex corporate networks, network motifs}, pubstate = {published}, tppubtype = {article} } In corporate networks, firms are connected through links of corporate ownership and shared directors, connecting the control over major economic actors in our economies in meaningful and consequential ways. Most research thus far focused on the connectedness of firms as a result of one particular link type, analyzing node-specific metrics or global network-based methods to gain insights in the modelled corporate system. In this paper, we aim to understand multiplex corporate networks with multiple types of connections, specifically investigating the network’s essential building blocks: multiplex network motifs. Motifs, which are small subgraph patterns occurring at significantly higher frequencies than in similar random networks, have demonstrated their usefulness in understanding the structure of many types of real-world networks. However, detecting motifs in multiplex networks is nontrivial for two reasons. First of all, there are no out-of-the-box subgraph enumeration algorithms for multiplex networks. Second, existing null models to test network motif significance, are unable to incorporate the interlayer dependencies in the multiplex network. We solve these two issues by introducing a layer encoding algorithm that incorporates the multiplex aspect in the subgraph enumeration phase. In addition, we propose a null model that is able to preserve the interlayer connectedness, while taking into account that one of the link types is actually the result of a projection of an underlying bipartite network. The experimental section considers the corporate network of Germany, in which tens of thousands of firms are connected through several hundred thousand links. We demonstrate how incorporating the multiplex aspect in motif detection is able to reveal new insights that could not be obtained by studying only one type of relationship. In a general sense, the motifs reflect known corporate governance practices related to the monitoring of investments and the concentration of ownership. A substantial fraction of the discovered motifs is typical for an industrialized country such as Germany, whereas others seem specific for certain economic sectors. Interestingly, we find that motifs involving financial firms are over-represented amongst the larger and more complex motifs. This demonstrates the prominent role of the financial sector in Germany’s largely industry-oriented corporate network. |
Garcia-Bernardo, J; Takes, F W The Effects of Data Quality on the Analysis of Corporate Board Interlock Networks Journal Article Information Systems, Elsevier, 78 , pp. 164-172, 2018. Abstract | Links | BibTeX | Tags: assessment methods, data quality, global board interlock network, social networks @article{DataQuality, title = {The Effects of Data Quality on the Analysis of Corporate Board Interlock Networks}, author = {J Garcia-Bernardo and F W Takes}, url = {https://www.sciencedirect.com/science/article/pii/S0306437917302272}, doi = {10.1016/j.is.2017.10.005}, year = {2018}, date = {2018-11-15}, journal = {Information Systems, Elsevier}, volume = {78}, pages = {164-172}, abstract = {Nowadays, social network data of ever increasing size is gathered, stored and analyzed by researchers from a range of disciplines. This data is often automatically gathered from API’s, websites or existing databases. As a result, the quality of this data is typically not manually validated, and the resulting social networks may be based on false, biased or incomplete data. In this paper, we investigate the effect of data quality issues on the analysis of large networks. We focus on the global board interlock network, in which nodes represent firms across the globe, and edges model social ties between firms – shared board members holding a position at both firms. First, we demonstrate how we can automatically assess the completeness of a large dataset of 160 million firms, in which data is missing not at random. Second, we present a novel method to increase the accuracy of the entries in our data. By comparing the expected and empirical characteristics of the resulting network topology, we develop a technique that automatically prunes and merges duplicate nodes and edges. Third, we use a case study of the board interlock network of Sweden to show how poor quality data results in distorted network topologies, incorrect community division, biased centrality values and abnormal influence spread under a well-known diffusion model. Finally, we demonstrate how the proposed data quality assessment methods help restore the network structure, ultimately allowing us to derive meaningful and correct results from the analysis of the network.}, keywords = {assessment methods, data quality, global board interlock network, social networks}, pubstate = {published}, tppubtype = {article} } Nowadays, social network data of ever increasing size is gathered, stored and analyzed by researchers from a range of disciplines. This data is often automatically gathered from API’s, websites or existing databases. As a result, the quality of this data is typically not manually validated, and the resulting social networks may be based on false, biased or incomplete data. In this paper, we investigate the effect of data quality issues on the analysis of large networks. We focus on the global board interlock network, in which nodes represent firms across the globe, and edges model social ties between firms – shared board members holding a position at both firms. First, we demonstrate how we can automatically assess the completeness of a large dataset of 160 million firms, in which data is missing not at random. Second, we present a novel method to increase the accuracy of the entries in our data. By comparing the expected and empirical characteristics of the resulting network topology, we develop a technique that automatically prunes and merges duplicate nodes and edges. Third, we use a case study of the board interlock network of Sweden to show how poor quality data results in distorted network topologies, incorrect community division, biased centrality values and abnormal influence spread under a well-known diffusion model. Finally, we demonstrate how the proposed data quality assessment methods help restore the network structure, ultimately allowing us to derive meaningful and correct results from the analysis of the network. |
Fichtner, J; Heemskerk, E M The New Permanent Universal Owners: Index Funds, (Im)patient Capital, and the Claim of Long-termism Journal Article SSRN, pp. 1-30, 2018. Abstract | Links | BibTeX | Tags: asset managers, corporate governance, corporate ownership, index funds, shorttermism, varieties of capitalism @article{Fichter2019, title = {The New Permanent Universal Owners: Index Funds, (Im)patient Capital, and the Claim of Long-termism}, author = {J Fichtner and E M Heemskerk}, url = {https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3321597}, year = {2018}, date = {2018-11-13}, journal = {SSRN}, pages = {1-30}, abstract = {Fundamental change is happening in asset management – the shift from actively managed funds to index funds. This money mass migration into index funds has far-reaching consequences, because it leads to a concentration of corporate ownership in the hands of the ‘Big Three’ asset managers. We call BlackRock, Vanguard, and State Street the ‘New Permanent Universal Owners’ as they are invested indefinitely in thousands of member firms of stock indexes. We provide novel findings on the combined ownership of the Big Three in 17 major stock indexes from nine countries. Furthermore, we shed light on the impact of index funds on the dichotomy between ‘patient’ and ‘impatient’ capital. The Big Three have proclaimed themselves champions of long-termism. We analyze their voting behavior in five countries concerning two proxies for corporate short-termism: share buybacks, and mergers and acquisitions. So far, they have not unambiguously acted as champions of long-termism.}, keywords = {asset managers, corporate governance, corporate ownership, index funds, shorttermism, varieties of capitalism}, pubstate = {published}, tppubtype = {article} } Fundamental change is happening in asset management – the shift from actively managed funds to index funds. This money mass migration into index funds has far-reaching consequences, because it leads to a concentration of corporate ownership in the hands of the ‘Big Three’ asset managers. We call BlackRock, Vanguard, and State Street the ‘New Permanent Universal Owners’ as they are invested indefinitely in thousands of member firms of stock indexes. We provide novel findings on the combined ownership of the Big Three in 17 major stock indexes from nine countries. Furthermore, we shed light on the impact of index funds on the dichotomy between ‘patient’ and ‘impatient’ capital. The Big Three have proclaimed themselves champions of long-termism. We analyze their voting behavior in five countries concerning two proxies for corporate short-termism: share buybacks, and mergers and acquisitions. So far, they have not unambiguously acted as champions of long-termism. |
Bogaardt, L; Takes, F W Estimating Subgraph Generation Models to Understand Large Network Formation Inproceedings Proceedings of the 14th IEEE International Conference on e-Science, pp. 375-376, IEEE, 2018. Links | BibTeX | Tags: IEEE, large network formation, subgraph generation models @inproceedings{Bogaardt2018, title = {Estimating Subgraph Generation Models to Understand Large Network Formation}, author = {L Bogaardt and F W Takes}, url = {https://www.researchgate.net/publication/329955901_Estimating_Subgraph_Generation_Models_to_Understand_Large_Network_Formation}, doi = {10.1109/eScience.2018.00106}, year = {2018}, date = {2018-10-30}, booktitle = {Proceedings of the 14th IEEE International Conference on e-Science}, pages = {375-376}, publisher = {IEEE}, keywords = {IEEE, large network formation, subgraph generation models}, pubstate = {published}, tppubtype = {inproceedings} } |
van Kuppevelt, D E; Takes, F W; Heemskerk, E M Understanding evolving communities in transnational board interlock networks Inproceedings Proceedings of the 14th IEEE International Conference on e-Science, pp. 312-313, IEEE, 2018. Links | BibTeX | Tags: communities, networks, transnational board interlocks @inproceedings{vanKuppevelt2018, title = {Understanding evolving communities in transnational board interlock networks}, author = { D E van Kuppevelt and F W Takes and E M Heemskerk}, url = {https://ieeexplore.ieee.org/document/8588688}, doi = { 10.1109/eScience.2018.00069}, year = {2018}, date = {2018-10-30}, booktitle = {Proceedings of the 14th IEEE International Conference on e-Science}, pages = {312-313}, publisher = {IEEE}, keywords = {communities, networks, transnational board interlocks}, pubstate = {published}, tppubtype = {inproceedings} } |
Babic, M Actors, Not Markets: Bringing Corporate Power Back in International Studies Journal Article International Studies Review, 0 (0), pp. 1-2, 2018. Links | BibTeX | Tags: corporations, Globalization, power, states @article{Babic2018, title = {Actors, Not Markets: Bringing Corporate Power Back in International Studies}, author = {M Babic}, url = {https://academic.oup.com/isr/advance-article/doi/10.1093/isr/viy059/5063604}, doi = {https://doi.org/10.1093/isr/viy059}, year = {2018}, date = {2018-08-01}, journal = {International Studies Review}, volume = {0}, number = {0}, pages = {1-2}, keywords = {corporations, Globalization, power, states}, pubstate = {published}, tppubtype = {article} } |
Babic, M; Heemskerk, E M; Fichtner, J Who is more powerful – states or corporations? Online The Conversation 2018. Abstract | Links | BibTeX | Tags: Globalization @online{statesorcorps, title = {Who is more powerful – states or corporations?}, author = {M Babic and E M Heemskerk and J Fichtner}, url = {http://theconversation.com/who-is-more-powerful-states-or-corporations-99616}, year = {2018}, date = {2018-07-10}, organization = {The Conversation}, abstract = {Who holds the power in international politics? Most people would probably say it’s the largest states in the global system. The current landscape of international relations seems to affirm this intuition: new Russian geopolitics, “America First” and Chinese state-led global expansion, among others, seem to put state power back in charge after decades of globalisation. Yet multinationals like Apple and Starbucks still wield phenomenal power. They oversee huge supply chains, sell products all over the world, and help mould international politics to their interests. In some respects, multinationals have governments at their beck and call – witness their consistent success at dodging tax payments. So when it comes to international politics, are states really calling the shots?}, keywords = {Globalization}, pubstate = {published}, tppubtype = {online} } Who holds the power in international politics? Most people would probably say it’s the largest states in the global system. The current landscape of international relations seems to affirm this intuition: new Russian geopolitics, “America First” and Chinese state-led global expansion, among others, seem to put state power back in charge after decades of globalisation. Yet multinationals like Apple and Starbucks still wield phenomenal power. They oversee huge supply chains, sell products all over the world, and help mould international politics to their interests. In some respects, multinationals have governments at their beck and call – witness their consistent success at dodging tax payments. So when it comes to international politics, are states really calling the shots? |
Majiti, O University of Amsterdam, 2018. Abstract | Links | BibTeX | Tags: Big Three @mastersthesis{Oumaima, title = {Are the Sleeping Giants Awakening? An Investigation into the Investment Stewardship Efforts of the Big Three Passive Investment Managers}, author = {O Majiti}, url = {https://corpnet.uva.nl/oumaimamajiti_11047488_scriptie-3/}, year = {2018}, date = {2018-06-27}, school = {University of Amsterdam}, abstract = {Since the 2008 financial crisis there has been a rise in passive investment strategies, resulting in a re-concentration of ownership in the hands of the Big Three passive investment managers: BlackRock, Vanguard and State Street Global Advisors (SSGA). These asset managers have expressed that even though they deploy passive investment strategies, they are not passive owners. The passive asset managers actively promote environmental, social and governance (ESG) standards to their investee companies, aiming to protect and ensure long-term value creation for their clients. The two main tools of this investment stewardship approach, as it has been dubbed, are voting against management in shareholder meetings and company engagements. Many people have expressed their concerns over BlackRock, Vanguard and SSGA stepping up their investment stewardship responsibilities. The biggest concern is that the index managers, and more specifically the small group of investment stewardship team members, can potentially influence the corporate governance decision-making of a large number of firms, especially through the behind-closed-doors engagements. This thesis shows that whether and to what extent the Big Three have stepped up their investment stewardship efforts differs strongly. BlackRock hasn’t increased both its votes against management and number of engagements, Vanguard has increased its number of engagements but votes less often against management and SSGA has increased both its votes against management and number of engagements. At the same time, BlackRock has been the most vocal about stepping up its investment stewardship efforts. This thesis lastly shows that the Big Three’s investment stewardship teams strongly differ in recruitment style and composition. }, keywords = {Big Three}, pubstate = {published}, tppubtype = {mastersthesis} } Since the 2008 financial crisis there has been a rise in passive investment strategies, resulting in a re-concentration of ownership in the hands of the Big Three passive investment managers: BlackRock, Vanguard and State Street Global Advisors (SSGA). These asset managers have expressed that even though they deploy passive investment strategies, they are not passive owners. The passive asset managers actively promote environmental, social and governance (ESG) standards to their investee companies, aiming to protect and ensure long-term value creation for their clients. The two main tools of this investment stewardship approach, as it has been dubbed, are voting against management in shareholder meetings and company engagements. Many people have expressed their concerns over BlackRock, Vanguard and SSGA stepping up their investment stewardship responsibilities. The biggest concern is that the index managers, and more specifically the small group of investment stewardship team members, can potentially influence the corporate governance decision-making of a large number of firms, especially through the behind-closed-doors engagements. This thesis shows that whether and to what extent the Big Three have stepped up their investment stewardship efforts differs strongly. BlackRock hasn’t increased both its votes against management and number of engagements, Vanguard has increased its number of engagements but votes less often against management and SSGA has increased both its votes against management and number of engagements. At the same time, BlackRock has been the most vocal about stepping up its investment stewardship efforts. This thesis lastly shows that the Big Three’s investment stewardship teams strongly differ in recruitment style and composition. |
Fichtner, J Meet the New Owners of Corporate America Online Cambridge Core Blog 2018. Abstract | Links | BibTeX | Tags: Ownership @online{meetthenew, title = {Meet the New Owners of Corporate America}, author = {J Fichtner}, url = {http://blog.journals.cambridge.org/2018/05/23/meet-the-new-owners-of-corporate-america/?utm_source=Twitter&utm_medium=Hootsuite&utm_campaign=JMO%20May%2018}, year = {2018}, date = {2018-05-23}, journal = {Cambridge Core Blog}, organization = {Cambridge Core Blog}, abstract = {A seismic shift is going on in finance still largely unnoticed by the public. People and institutions are increasingly investing their money into index tracker funds instead of actively managed mutual funds. Index funds simply buy shares of all firms that are part of an index. Therefore, they can charge significantly lower fees to their investors — there is no well-paid fund manager that tries to beat the market. Besides low fees, they offer similar returns to active funds, as the latter have not been able to consistently beat major stock indexes, such as the S&P500. The scale of this money migration is astounding. Between 2008 and 2016, about US$1,200 billion left actively managed funds, while approximately US$1,400 billion moved into index funds.}, keywords = {Ownership}, pubstate = {published}, tppubtype = {online} } A seismic shift is going on in finance still largely unnoticed by the public. People and institutions are increasingly investing their money into index tracker funds instead of actively managed mutual funds. Index funds simply buy shares of all firms that are part of an index. Therefore, they can charge significantly lower fees to their investors — there is no well-paid fund manager that tries to beat the market. Besides low fees, they offer similar returns to active funds, as the latter have not been able to consistently beat major stock indexes, such as the S&P500. The scale of this money migration is astounding. Between 2008 and 2016, about US$1,200 billion left actively managed funds, while approximately US$1,400 billion moved into index funds. |
Babic, M Why we need to talk about the state in globalization Online Medium.com 2018. Abstract | Links | BibTeX | Tags: Globalization @online{stateglobalization, title = {Why we need to talk about the state in globalization}, author = {M Babic}, url = {https://medium.com/@mbabic_1/why-we-need-to-talk-about-the-state-in-globalization-b37234dd4268}, year = {2018}, date = {2018-03-04}, organization = {Medium.com}, abstract = {In current international studies, the idea of globalization is omni-present and probably the key background concept to most research efforts. The other side of this globalization-coin — namely the state — only recently got back on the agenda of scholars, but still lacks the broad recognition as a core category in understanding globalization. I first propose to engage more in discussions about state power in the global economy in order to broaden our understanding of current global transformations. Second, I suggest a categorization of the main ambiguities in thinking about state as a concept today. I end with the call to being open to these ambiguities in our efforts to understand state and corporate power in the 21st century.}, keywords = {Globalization}, pubstate = {published}, tppubtype = {online} } In current international studies, the idea of globalization is omni-present and probably the key background concept to most research efforts. The other side of this globalization-coin — namely the state — only recently got back on the agenda of scholars, but still lacks the broad recognition as a core category in understanding globalization. I first propose to engage more in discussions about state power in the global economy in order to broaden our understanding of current global transformations. Second, I suggest a categorization of the main ambiguities in thinking about state as a concept today. I end with the call to being open to these ambiguities in our efforts to understand state and corporate power in the 21st century. |
Heemskerk, E M; Young, K; Takes, F W; Cronin, B; Garcia-Bernardo, J; Popov, V; Winecoff, W K; Henriksen, L F; Laurin-Lamonthe, A The Promise and Perils of Using Big Data in the Study of Corporate Networks: Problems, Diagnostics and Fixes Journal Article Global Networks, 18 (1), pp. 3-32, 2018. Abstract | Links | BibTeX | Tags: @article{BigData, title = { The Promise and Perils of Using Big Data in the Study of Corporate Networks: Problems, Diagnostics and Fixes}, author = {E M Heemskerk and K Young and F W Takes and B Cronin and J Garcia-Bernardo and V Popov and W K Winecoff and L F Henriksen and A Laurin-Lamonthe}, url = {http://onlinelibrary.wiley.com/doi/10.1111/glob.12183/full}, doi = {10.1111/glob.12183}, year = {2018}, date = {2018-01-01}, journal = {Global Networks}, volume = {18}, number = {1}, pages = {3-32}, abstract = {Network data on connections between corporate actors and entities – for instance through co-ownership ties or elite social networks – are increasingly available to researchers interested in probing the many important questions related to the study of modern capitalism. Given the analytical challenges associated with the nature of the subject matter, variable data quality and other problems associated with currently available data on this scale, we discuss the promise and perils of using big corporate network data (BCND). We propose a standard procedure for helping researchers deal with BCND problems. While acknowledging that different research questions require different approaches to data quality, we offer a schematic platform that researchers can follow to make informed and intelligent decisions about BCND issues and address these through a specific work-flow procedure. For each step in this procedure, we provide a set of best practices for how to identify, resolve and minimize the BCND problems that arise.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Network data on connections between corporate actors and entities – for instance through co-ownership ties or elite social networks – are increasingly available to researchers interested in probing the many important questions related to the study of modern capitalism. Given the analytical challenges associated with the nature of the subject matter, variable data quality and other problems associated with currently available data on this scale, we discuss the promise and perils of using big corporate network data (BCND). We propose a standard procedure for helping researchers deal with BCND problems. While acknowledging that different research questions require different approaches to data quality, we offer a schematic platform that researchers can follow to make informed and intelligent decisions about BCND issues and address these through a specific work-flow procedure. For each step in this procedure, we provide a set of best practices for how to identify, resolve and minimize the BCND problems that arise. |
Fennema, M; Heemskerk, E M When Theory Meets Methods: The Naissance of Computer Assisted Corporate Interlock Research Journal Article Global Networks, 18 (1), pp. 81-104, 2018. Abstract | Links | BibTeX | Tags: @article{Naissance, title = {When Theory Meets Methods: The Naissance of Computer Assisted Corporate Interlock Research}, author = {M Fennema and E M Heemskerk}, url = {http://onlinelibrary.wiley.com/doi/10.1111/glob.12178/full}, doi = {10.1111/glob.12178}, year = {2018}, date = {2018-01-01}, journal = {Global Networks}, volume = {18}, number = {1}, pages = {81-104}, abstract = {In this article, we study the emergence of computer aided network analysis as an example of ‘Mertonian’ multiple discovery. Computer assisted quantitative network analysis emerged around 1970 and small groups of researchers in different universities, who were independent of each other and looking for the right concepts and computer programs to implement graph theory in social analysis, first applied it to corporate interlock networks. We show how mathematical graph theory provided a toolbox for systematic network analysis and that simultaneously in the Netherlands and the United States this toolbox found an application in the study of corporate power. A historical narrative covers the three main centres in which large-scale corporate network analysis emerged – Amsterdam, California and Stony Brook. For each centre, we provide a sketch of the people involved, the tools they used, and the motivations that brought them to this topic. Our analysis makes clear that one cannot understand the emergence of computer aided network analysis without considering the personal and often political motivations of those who engaged in the first board interlock studies. Insurgent students of political science and sociology pushed for a research agenda on corporate power and found support from scholars who were keen to develop innovative network analysis methods. Hence, corporate network analysis became a legitimate field of research.}, keywords = {}, pubstate = {published}, tppubtype = {article} } In this article, we study the emergence of computer aided network analysis as an example of ‘Mertonian’ multiple discovery. Computer assisted quantitative network analysis emerged around 1970 and small groups of researchers in different universities, who were independent of each other and looking for the right concepts and computer programs to implement graph theory in social analysis, first applied it to corporate interlock networks. We show how mathematical graph theory provided a toolbox for systematic network analysis and that simultaneously in the Netherlands and the United States this toolbox found an application in the study of corporate power. A historical narrative covers the three main centres in which large-scale corporate network analysis emerged – Amsterdam, California and Stony Brook. For each centre, we provide a sketch of the people involved, the tools they used, and the motivations that brought them to this topic. Our analysis makes clear that one cannot understand the emergence of computer aided network analysis without considering the personal and often political motivations of those who engaged in the first board interlock studies. Insurgent students of political science and sociology pushed for a research agenda on corporate power and found support from scholars who were keen to develop innovative network analysis methods. Hence, corporate network analysis became a legitimate field of research. |
2017 |
Huijzer, M J Wie vormen de (bedrijfs)elite? Online StukRoodVlees 2017. Abstract | Links | BibTeX | Tags: @online{joukestukrood, title = {Wie vormen de (bedrijfs)elite?}, author = {M J Huijzer}, url = {http://stukroodvlees.nl/wie-vormen-de-bedrijfselite/}, year = {2017}, date = {2017-12-18}, organization = {StukRoodVlees}, abstract = {Zaterdag publiceerde de Volkskrant voor de 12e keer de top 200 van meest invloedrijke personen in Nederland. De lijst, dit jaar opnieuw aangevoerd door Hans Wijers, voormalig minister van Economische zaken en commissaris bij verschillende Nederlandse multinationals, is meer dan een rangschikking van individuen. Het is volgens de Volkskrant ook een poging om de “gevestigde orde”, de “bestuurselite” of de “schaduwmacht van de notabelen” in kaart te brengen, met de regering “als het centrum van de macht”. Uit een database van meer dan 23.000 personen die actief zijn in grote bedrijven en bij belangrijke organisaties, wordt de lijst aan de hand van een netwerkanalyse van dubbelposities samengesteld. Vervolgens wegen de journalisten sommige organisaties en personen nog een stukje zwaarder waardoor sommige personen iets hoger en andere personen iets lager op de lijst komen. Bij het samenstellen van de lijst worden een aantal beproefde en valide netwerkanalysemethodes gebruikt om de macht en invloed van de individuen te bepalen. Toch geeft de lijst op zijn slechtst een vertekend, en op zijn best een onvolledig beeld van de werkelijke bestuurselite in Nederland. Ten eerste omdat bij de lijst het primaat bij de politiek ligt en ten tweede omdat het onwaarschijnlijk is dat het establishment elk jaar precies even groot is. Waarom bestaat de lijst elk jaar uit 200 personen? Waarom bestaat de lijst niet uit meer of uit minder mensen en hoe bakenen we de elite op een juiste manier af?}, keywords = {}, pubstate = {published}, tppubtype = {online} } Zaterdag publiceerde de Volkskrant voor de 12e keer de top 200 van meest invloedrijke personen in Nederland. De lijst, dit jaar opnieuw aangevoerd door Hans Wijers, voormalig minister van Economische zaken en commissaris bij verschillende Nederlandse multinationals, is meer dan een rangschikking van individuen. Het is volgens de Volkskrant ook een poging om de “gevestigde orde”, de “bestuurselite” of de “schaduwmacht van de notabelen” in kaart te brengen, met de regering “als het centrum van de macht”. Uit een database van meer dan 23.000 personen die actief zijn in grote bedrijven en bij belangrijke organisaties, wordt de lijst aan de hand van een netwerkanalyse van dubbelposities samengesteld. Vervolgens wegen de journalisten sommige organisaties en personen nog een stukje zwaarder waardoor sommige personen iets hoger en andere personen iets lager op de lijst komen. Bij het samenstellen van de lijst worden een aantal beproefde en valide netwerkanalysemethodes gebruikt om de macht en invloed van de individuen te bepalen. Toch geeft de lijst op zijn slechtst een vertekend, en op zijn best een onvolledig beeld van de werkelijke bestuurselite in Nederland. Ten eerste omdat bij de lijst het primaat bij de politiek ligt en ten tweede omdat het onwaarschijnlijk is dat het establishment elk jaar precies even groot is. Waarom bestaat de lijst elk jaar uit 200 personen? Waarom bestaat de lijst niet uit meer of uit minder mensen en hoe bakenen we de elite op een juiste manier af? |
Garcia-Bernardo, J; Fichtner, J; Takes, F W; Heemskerk, E M Sinks and Conduits: Identifying Offshore Financial Centers by using Big Data Journal Article IFC Review, Economic Report (Winter 2017/ 18), pp. 61-63, 2017. Abstract | Links | BibTeX | Tags: @article{sectorresearch, title = {Sinks and Conduits: Identifying Offshore Financial Centers by using Big Data}, author = {J Garcia-Bernardo and J Fichtner and F W Takes and E M Heemskerk}, url = {https://corpnet.uva.nl/wp-content/uploads/IFC-Economic-Report.pdf}, year = {2017}, date = {2017-11-30}, journal = {IFC Review}, volume = {Economic Report}, number = {Winter 2017/ 18}, pages = {61-63}, abstract = {Th is article is based on J. Garcia-Bernardo, J. Fichtner, F.W. Takes and E.M. Heemskerk, ‘Uncovering Off shore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network’, Scientifi c Reports 7, article 6246, 2017. Th e research illustrates that ‘off shore’ jurisdictions are much more complex than the traditional notion of an island state secreting away cash. Th e University of Amsterdam researchers found that the off shore industry is in fact a complex network of fi nancial conduits, which involve many of the traditional ‘onshore’ centres. }, keywords = {}, pubstate = {published}, tppubtype = {article} } Th is article is based on J. Garcia-Bernardo, J. Fichtner, F.W. Takes and E.M. Heemskerk, ‘Uncovering Off shore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network’, Scientifi c Reports 7, article 6246, 2017. Th e research illustrates that ‘off shore’ jurisdictions are much more complex than the traditional notion of an island state secreting away cash. Th e University of Amsterdam researchers found that the off shore industry is in fact a complex network of fi nancial conduits, which involve many of the traditional ‘onshore’ centres. |
Takes, F W; Kosters, W A; Witte, B Studies in Computational Intelligence, 689 , pp. 502-515, Springer, 2017. Abstract | Links | BibTeX | Tags: @inbook{Detecting, title = {Detecting Motifs in Multiplex Corporate Networks, in Proceedings of the 6th International Conference on Complex Networks}, author = {F W Takes and W A Kosters and B Witte}, url = {https://link.springer.com/chapter/10.1007%2F978-3-319-72150-7_41}, year = {2017}, date = {2017-11-27}, booktitle = {Studies in Computational Intelligence}, journal = {Studies in Computational Intelligence}, volume = {689}, pages = {502-515}, publisher = {Springer}, series = {Studies in Computational Intelligence}, abstract = {The main topic of this paper is the discovery of motifs in multiplex corporate networks. Network motifs are small subgraphs occurring at significantly higher numbers than in similar random networks. They can be seen as the building blocks of a complex network. In real-world network data, multiple types of (possibly overlapping) relationships may be present among the nodes, forming so-called multiplex networks. Detecting motifs in such networks is difficult, as existing subgraph enumeration algorithms are not directly applicable to multiplex network data. In addition, the selection of a proper multiplex null model to test the significance of the enumerated subgraphs is nontrivial. This paper addresses these two problems, resulting in three contributions. First, we present a method based on layer encoding for adequately handling the multiplex aspect in subgraph enumeration. Second, a null model is proposed that is able to preserve the relationship between the different types of links, taking into account that a particular link type may be the result of a projection from a bipartite network. Finally, we perform experiments on corporate network data from Germany, in which around 75 000 nodes represent corporations and roughly 195 000 links represent connectedness of firms based on shared board members and ownership. We demonstrate how incorporating the multiplex aspect in motif detection is able to reveal new insights that could not be obtained by studying only one type of relationship. Furthermore, results uncover how the financial sector is over-represented in the more complex motifs, hinting at a surprisingly prominent role of the financial sector in the largely industry-oriented corporate network of Germany.}, keywords = {}, pubstate = {published}, tppubtype = {inbook} } The main topic of this paper is the discovery of motifs in multiplex corporate networks. Network motifs are small subgraphs occurring at significantly higher numbers than in similar random networks. They can be seen as the building blocks of a complex network. In real-world network data, multiple types of (possibly overlapping) relationships may be present among the nodes, forming so-called multiplex networks. Detecting motifs in such networks is difficult, as existing subgraph enumeration algorithms are not directly applicable to multiplex network data. In addition, the selection of a proper multiplex null model to test the significance of the enumerated subgraphs is nontrivial. This paper addresses these two problems, resulting in three contributions. First, we present a method based on layer encoding for adequately handling the multiplex aspect in subgraph enumeration. Second, a null model is proposed that is able to preserve the relationship between the different types of links, taking into account that a particular link type may be the result of a projection from a bipartite network. Finally, we perform experiments on corporate network data from Germany, in which around 75 000 nodes represent corporations and roughly 195 000 links represent connectedness of firms based on shared board members and ownership. We demonstrate how incorporating the multiplex aspect in motif detection is able to reveal new insights that could not be obtained by studying only one type of relationship. Furthermore, results uncover how the financial sector is over-represented in the more complex motifs, hinting at a surprisingly prominent role of the financial sector in the largely industry-oriented corporate network of Germany. |
Babic, M; Fichtner, J; Heemskerk, E M States versus Corporations: Rethinking the Power of Business in International Politics Journal Article The International Spectator: Italian Journal of International Affairs, 2017. Abstract | Links | BibTeX | Tags: @article{States, title = {States versus Corporations: Rethinking the Power of Business in International Politics}, author = {M Babic and J Fichtner and E M Heemskerk }, url = {http://www.tandfonline.com/doi/full/10.1080/03932729.2017.1389151}, year = {2017}, date = {2017-11-16}, journal = {The International Spectator: Italian Journal of International Affairs}, abstract = {Over 25 years ago, Susan Strange urged IR scholars to include multinational corporations in their analysis. Within IR and IPE discussions, this was either mostly ignored or reflected in an empirically and methodologically unsatisfactory way. We reiterate Strange’s call by sketching a fine-grained theoretical and empirical approach that includes both states and corporations as juxtaposed actors that interact in transnational networks inherent to the contemporary international political economy. This realistic, juxtaposed, actor- and relations-centred perspective on state and corporate power in the global system is empirically illustrated by the example of the transnationalisation of state ownership.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Over 25 years ago, Susan Strange urged IR scholars to include multinational corporations in their analysis. Within IR and IPE discussions, this was either mostly ignored or reflected in an empirically and methodologically unsatisfactory way. We reiterate Strange’s call by sketching a fine-grained theoretical and empirical approach that includes both states and corporations as juxtaposed actors that interact in transnational networks inherent to the contemporary international political economy. This realistic, juxtaposed, actor- and relations-centred perspective on state and corporate power in the global system is empirically illustrated by the example of the transnationalisation of state ownership. |
Fichtner, J LSE Latin America and Carribean Centre 2017. Abstract | Links | BibTeX | Tags: @online{LSECayman, title = {The Cayman conundrum: why is one tiny archipelago the largest financial centre in Latin America and the Caribbean?}, author = {J Fichtner}, url = {http://blogs.lse.ac.uk/latamcaribbean/2017/11/02/the-cayman-conundrum-why-is-one-tiny-archipelago-the-largest-financial-centre-in-latin-america-and-the-caribbean/}, year = {2017}, date = {2017-11-02}, organization = {LSE Latin America and Carribean Centre}, abstract = {Analysing how millions of multinational corporations structure their global ownership chains reveals that Cayman acts as a ‘sink’ offshore financial centre where foreign capital accumulates and data trails often end, writes Jan Fichtner (University of Amsterdam).}, keywords = {}, pubstate = {published}, tppubtype = {online} } Analysing how millions of multinational corporations structure their global ownership chains reveals that Cayman acts as a ‘sink’ offshore financial centre where foreign capital accumulates and data trails often end, writes Jan Fichtner (University of Amsterdam). |
Babic, M; Wilson, K Neymar and State Money: How Sovereign Investment enters Global Capitalism Online Medium.com 2017. Abstract | Links | BibTeX | Tags: @online{Neymar, title = {Neymar and State Money: How Sovereign Investment enters Global Capitalism}, author = {M Babic and K Wilson}, url = {https://medium.com/@UvACORPNET/neymar-and-state-money-how-sovereign-investment-enters-global-capitalism-41e329c2d213}, year = {2017}, date = {2017-09-11}, organization = {Medium.com}, abstract = {This blog post discusses the activities, outreach and role of the Qatar Investment Authority (QIA) that recently drew global attention by enabling the most expensive football player transfer in history. Besides the 222 Mio. € investment in Brazilian superstar Neymar, the QIA is very active as an investment fund around the world. The interesting and hardly studied aspect about the QIA is its status as wholly state-owned entity participating in global capitalism. CORPNET is able to track these activities on a global scale by looking at fine-grained ownership data. This investigation of cross-border state ownership networks goes beyond Sovereign Wealth Funds and can be extended to any state-owned entity around the world.}, keywords = {}, pubstate = {published}, tppubtype = {online} } This blog post discusses the activities, outreach and role of the Qatar Investment Authority (QIA) that recently drew global attention by enabling the most expensive football player transfer in history. Besides the 222 Mio. € investment in Brazilian superstar Neymar, the QIA is very active as an investment fund around the world. The interesting and hardly studied aspect about the QIA is its status as wholly state-owned entity participating in global capitalism. CORPNET is able to track these activities on a global scale by looking at fine-grained ownership data. This investigation of cross-border state ownership networks goes beyond Sovereign Wealth Funds and can be extended to any state-owned entity around the world. |
Ajdacic, L D The Wealth Defense Industry: Accountancy Firms and the Making of Complex Corporate Structures Masters Thesis University of Amsterdam, 2017. Abstract | Links | BibTeX | Tags: @mastersthesis{Lena, title = {The Wealth Defense Industry: Accountancy Firms and the Making of Complex Corporate Structures}, author = {L D Ajdacic}, url = {http://corpnet.uva.nl/wp-content/uploads/Lena_Ajdacic_TheWealthDefenceIndustry_MT_17.08.17_small_withoutp37to38.pdf}, year = {2017}, date = {2017-08-17}, school = {University of Amsterdam}, abstract = {In a context of increasing capital mobility, companies build wealth defence strategies to keep economic resources within their circuit. Simultaneously, states compete for the attraction of foreign capital through the offer of specific legal advantages or by positioning themselves as offshore financial centers. Looking at international regulatory competition and wealth defence processes, most studies either focus on states or on corporations and thereby neglect the role of intermediary actors. However, by supplying organisational and tax related innovation, the ‘wealth defence industry’, as I label it, could be a main driver of the ongoing profit shifting practices. This study looked at the role of accountancy firms, an intermediary actor marked by both, a direct insight into the corporate organisation of their clients, and a close access to the side of regulators. Drawing on information from Orbis, a database covering companies worldwide, the study addressed the difference between the Big Four auditors and smaller auditors in regards to the corporate structure of their clients. To account for country variation, I applied mixed multivariate regression models. The paper shows that clients of the Big Four have a higher use of wealth defence related corporate structures. Furthermore, the influence of the Big Four increases with the size of the client. Drawing on large-scale data, this study provides evidence that the supply of wealth defence strategies by the Big Four is not a rare exception. It is a relationship which has a systematic component.}, keywords = {}, pubstate = {published}, tppubtype = {mastersthesis} } In a context of increasing capital mobility, companies build wealth defence strategies to keep economic resources within their circuit. Simultaneously, states compete for the attraction of foreign capital through the offer of specific legal advantages or by positioning themselves as offshore financial centers. Looking at international regulatory competition and wealth defence processes, most studies either focus on states or on corporations and thereby neglect the role of intermediary actors. However, by supplying organisational and tax related innovation, the ‘wealth defence industry’, as I label it, could be a main driver of the ongoing profit shifting practices. This study looked at the role of accountancy firms, an intermediary actor marked by both, a direct insight into the corporate organisation of their clients, and a close access to the side of regulators. Drawing on information from Orbis, a database covering companies worldwide, the study addressed the difference between the Big Four auditors and smaller auditors in regards to the corporate structure of their clients. To account for country variation, I applied mixed multivariate regression models. The paper shows that clients of the Big Four have a higher use of wealth defence related corporate structures. Furthermore, the influence of the Big Four increases with the size of the client. Drawing on large-scale data, this study provides evidence that the supply of wealth defence strategies by the Big Four is not a rare exception. It is a relationship which has a systematic component. |
Garcia-Bernardo, J; Fichtner, J; Takes, F W; Heemskerk, E M Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network Journal Article Scientific Reports, 7 (Article 6246), 2017. Abstract | Links | BibTeX | Tags: @article{Offshore2017, title = {Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network}, author = {J Garcia-Bernardo and J Fichtner and F W Takes and E M Heemskerk}, url = {https://www.nature.com/articles/s41598-017-06322-9}, doi = {10.1038/s41598-017-06322-9}, year = {2017}, date = {2017-07-24}, journal = {Scientific Reports}, volume = {7}, number = {Article 6246}, abstract = {Multinational corporations use highly complex structures of parents and subsidiaries to organize their operations and ownership. O shore Financial Centers (OFCs) facilitate these structures through low taxation and lenient regulation, but are increasingly under scrutiny, for instance for enabling tax avoidance. Therefore, the identi cation of OFC jurisdictions has become a politicized and contested issue. We introduce a novel data-driven approach for identifying OFCs based on the global corporate ownership network, in which over 98 million rms (nodes) are connected through 71 million ownership relations. This granular rm-level network data uniquely allows identifying both sink-OFCs and conduit- OFCs. Sink-OFCs attract and retain foreign capital while conduit-OFCs are attractive intermediate destinations in the routing of international investments and enable the transfer of capital without taxation. We identify 24 sink-OFCs. In addition, a small set of ve countries – the Netherlands, the United Kingdom, Ireland, Singapore and Switzerland – canalize the majority of corporate o shore investment as conduit-OFCs. Each conduit jurisdiction is specialized in a geographical area and there is signi cant specialization based on industrial sectors. Against the idea of OFCs as exotic small islands that cannot be regulated, we show that many sink and conduit-OFCs are highly developed countries.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Multinational corporations use highly complex structures of parents and subsidiaries to organize their operations and ownership. O shore Financial Centers (OFCs) facilitate these structures through low taxation and lenient regulation, but are increasingly under scrutiny, for instance for enabling tax avoidance. Therefore, the identi cation of OFC jurisdictions has become a politicized and contested issue. We introduce a novel data-driven approach for identifying OFCs based on the global corporate ownership network, in which over 98 million rms (nodes) are connected through 71 million ownership relations. This granular rm-level network data uniquely allows identifying both sink-OFCs and conduit- OFCs. Sink-OFCs attract and retain foreign capital while conduit-OFCs are attractive intermediate destinations in the routing of international investments and enable the transfer of capital without taxation. We identify 24 sink-OFCs. In addition, a small set of ve countries – the Netherlands, the United Kingdom, Ireland, Singapore and Switzerland – canalize the majority of corporate o shore investment as conduit-OFCs. Each conduit jurisdiction is specialized in a geographical area and there is signi cant specialization based on industrial sectors. Against the idea of OFCs as exotic small islands that cannot be regulated, we show that many sink and conduit-OFCs are highly developed countries. |
Garcia-Bernardo, J; Heemskerk, E M; Takes, F W; Fichtner, J These five countries are conduits for the world's biggest tax havens Online The Conversation 2017. Abstract | Links | BibTeX | Tags: @online{ConversationTax, title = {These five countries are conduits for the world's biggest tax havens}, author = {J Garcia-Bernardo and E M Heemskerk and F W Takes and J Fichtner }, url = {https://theconversation.com/these-five-countries-are-conduits-for-the-worlds-biggest-tax-havens-79555}, year = {2017}, date = {2017-07-24}, organization = {The Conversation}, abstract = {First came the Panama Papers, then the BahamasLeaks. Journalists continue to shed light on and raise a public outcry over the offshore financial centres that corporations use to reduce their tax bill – something that is still being challenged in court. A new study has now uncovered all the world’s corporate tax havens and, for the first time, revealed the intermediary countries that companies use to funnel their money into these places. Published on July 24 in the academic journal Scientific Reports, the paper Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network shows that offshore finance is not the exclusive business of exotic, far-flung places such as the Cayman Islands and Bermuda. The Netherlands and the United Kingdom also play a crucial – although a heretofore obscure – role in the tax-avoidance game, acting as conduits for corporate profits as they make their way to tax havens.}, keywords = {}, pubstate = {published}, tppubtype = {online} } First came the Panama Papers, then the BahamasLeaks. Journalists continue to shed light on and raise a public outcry over the offshore financial centres that corporations use to reduce their tax bill – something that is still being challenged in court. A new study has now uncovered all the world’s corporate tax havens and, for the first time, revealed the intermediary countries that companies use to funnel their money into these places. Published on July 24 in the academic journal Scientific Reports, the paper Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network shows that offshore finance is not the exclusive business of exotic, far-flung places such as the Cayman Islands and Bermuda. The Netherlands and the United Kingdom also play a crucial – although a heretofore obscure – role in the tax-avoidance game, acting as conduits for corporate profits as they make their way to tax havens. |
Heemskerk, E M Langetermijnoriëntatie en de opkomst van passieve investeerders Journal Article Economisch Statistische Berichten (ESB), 102 (4751), pp. 320-321, 2017. Abstract | Links | BibTeX | Tags: @article{ESB, title = {Langetermijnoriëntatie en de opkomst van passieve investeerders}, author = {E M Heemskerk}, url = {https://esb.nu/esb/20029499/langetermijnorientatie-en-de-opkomst-van-passieve-investeerders}, year = {2017}, date = {2017-07-13}, journal = {Economisch Statistische Berichten (ESB)}, volume = {102}, number = {4751}, pages = {320-321}, abstract = {Passieve investeerders zijn de afgelopen jaren flinke gegroeid. BlackRock, Vanguard en State Street hebben nu belangen in de meeste beursgenoteerde bedrijven. Welke rol vervullen deze aandeelhouders en wat betekent dit voor het management?}, keywords = {}, pubstate = {published}, tppubtype = {article} } Passieve investeerders zijn de afgelopen jaren flinke gegroeid. BlackRock, Vanguard en State Street hebben nu belangen in de meeste beursgenoteerde bedrijven. Welke rol vervullen deze aandeelhouders en wat betekent dit voor het management? |
Heemskerk, E M Ligt het Rijnland nu in de VS? Lange termijn oriëntatie en passieve investeringsfondsen Journal Article Goed Bestuur & Toezicht, 13 (2), pp. 14-16, 2017. Abstract | Links | BibTeX | Tags: @article{Rijnland, title = {Ligt het Rijnland nu in de VS? Lange termijn oriëntatie en passieve investeringsfondsen}, author = {E M Heemskerk}, url = {http://heemskerk.socsci.uva.nl/pdfs/Ligt%20het%20Rijnland%20nu%20in%20de%20VS.pdf}, year = {2017}, date = {2017-06-16}, journal = {Goed Bestuur & Toezicht}, volume = {13}, number = {2}, pages = {14-16}, abstract = {Bedreigd door vijandige overnamepogingen roepen bestuurders van Nederlandse bedrijven en politici om beschermingsconstructies. Hun pleidooi voor de lange termijn lijkt wat hypocriet. De ongekende opkomst van Amerikaanse indexbeleggers verklaart wellicht meer. Enorme fondsen als Blackrock zijn op de lange termijn gericht en onderhouden veel contact met ‘hun’ ondernemingen.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Bedreigd door vijandige overnamepogingen roepen bestuurders van Nederlandse bedrijven en politici om beschermingsconstructies. Hun pleidooi voor de lange termijn lijkt wat hypocriet. De ongekende opkomst van Amerikaanse indexbeleggers verklaart wellicht meer. Enorme fondsen als Blackrock zijn op de lange termijn gericht en onderhouden veel contact met ‘hun’ ondernemingen. |
Shenkar, C; Heemskerk, E M; Fichtner, J The New Mandate Owners: Passive Asset Managers and the Decoupling of Corporate Ownership Journal Article Competition Policy International Antitrust Chronicle, Spring 2017 Volume 1 (3), pp. 51-57, 2017. Abstract | Links | BibTeX | Tags: @article{AntitrustChronicle, title = {The New Mandate Owners: Passive Asset Managers and the Decoupling of Corporate Ownership}, author = {C Shenkar and E M Heemskerk and J Fichtner}, url = {https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2988937}, year = {2017}, date = {2017-06-14}, journal = {Competition Policy International Antitrust Chronicle}, volume = {Spring 2017 Volume 1}, number = {3}, pages = {51-57}, abstract = {A major shift toward passively managed index funds in recent years has led to the re-concentration of corporate ownership in the hands of just three large asset management firms, the Big Three: BlackRock, Vanguard and State Street. We propose that this trend has re-structured ownership in capital markets. Adopting a contractual view to the corporate share, we re-define share holding and suggest that the New Mandate Owners in fact hold the essence of corporate power, as their aggregated positions capture the core element of the franchise of corporate voting.}, keywords = {}, pubstate = {published}, tppubtype = {article} } A major shift toward passively managed index funds in recent years has led to the re-concentration of corporate ownership in the hands of just three large asset management firms, the Big Three: BlackRock, Vanguard and State Street. We propose that this trend has re-structured ownership in capital markets. Adopting a contractual view to the corporate share, we re-define share holding and suggest that the New Mandate Owners in fact hold the essence of corporate power, as their aggregated positions capture the core element of the franchise of corporate voting. |
Fichtner, J; Heemskerk, E M; Garcia-Bernardo, J These three firms own corporate America Online The Conversation 2017. Abstract | Links | BibTeX | Tags: @online{ConversationFirms, title = {These three firms own corporate America}, author = {J Fichtner and E M Heemskerk and J Garcia-Bernardo }, url = {https://theconversation.com/these-three-firms-own-corporate-america-77072}, year = {2017}, date = {2017-05-10}, organization = {The Conversation}, abstract = {A fundamental change is underway in stock market investing, and the spin-off effects are poised to dramatically impact corporate America. In the past, individuals and large institutions mostly invested in actively managed mutual funds, such as Fidelity, in which fund managers pick stocks with the aim of beating the market. But since the financial crisis of 2008, investors have shifted to index funds, which replicate established stock indices, such as the S&P 500. The magnitude of the change is astounding: from 2007 to 2016, actively managed funds have recorded outflows of roughly US$1,200 billion, while index funds had inflows of over US$1,400 billion. In the first quarter of 2017, index funds brought in more than US$200 billion – the highest quarterly value on record.}, keywords = {}, pubstate = {published}, tppubtype = {online} } A fundamental change is underway in stock market investing, and the spin-off effects are poised to dramatically impact corporate America. In the past, individuals and large institutions mostly invested in actively managed mutual funds, such as Fidelity, in which fund managers pick stocks with the aim of beating the market. But since the financial crisis of 2008, investors have shifted to index funds, which replicate established stock indices, such as the S&P 500. The magnitude of the change is astounding: from 2007 to 2016, actively managed funds have recorded outflows of roughly US$1,200 billion, while index funds had inflows of over US$1,400 billion. In the first quarter of 2017, index funds brought in more than US$200 billion – the highest quarterly value on record. |
Fichtner, J; Heemskerk, E M; Garcia-Bernardo, J Hidden Power of the Big Three? Passive Index Funds, Re-Concentration of Corporate Ownership, and New Financial Risk Journal Article Business and Politics, 19 (2), pp. 298-326, 2017. Abstract | Links | BibTeX | Tags: @article{BigThree, title = {Hidden Power of the Big Three? Passive Index Funds, Re-Concentration of Corporate Ownership, and New Financial Risk}, author = {J Fichtner and E M Heemskerk and J Garcia-Bernardo}, url = {https://www.cambridge.org/core/journals/business-and-politics/article/hidden-power-of-the-big-three-passive-index-funds-reconcentration-of-corporate-ownership-and-new-financial-risk/30AD689509AAD62F5B677E916C28C4B6}, doi = {10.1017/bap.2017.6}, year = {2017}, date = {2017-04-25}, journal = {Business and Politics}, volume = {19}, number = {2}, pages = {298-326}, abstract = {Since 2008, a massive shift has occurred from active toward passive investment strategies. The passive index fund industry is dominated by BlackRock, Vanguard, and State Street, which we call the “Big Three.” We compre- hensively map the ownership of the Big Three in the United States and find that together they constitute the largest shareholder in 88 percent of the S&P 500 firms. In contrast to active funds, the Big Three hold relatively illiquid and perma- nent ownership positions. This has led to opposing views on incentives and pos- sibilities to actively exert shareholder power. Some argue passive investors have little shareholder power because they cannot “exit,” while others point out this gives them stronger incentives to actively influence corporations. Through an anal- ysis of proxy vote records we find that the Big Three do utilize coordinated voting strategies and hence follow a centralized corporate governance strategy. However, they generally vote with management, except at director (re-)elections. Moreover, the Big Three may exert “hidden power” through two channels: First, via private engagements with management of invested companies; and second, because company executives could be prone to internalizing the objectives of the Big Three. We discuss how this development entails new forms of financial risk.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Since 2008, a massive shift has occurred from active toward passive investment strategies. The passive index fund industry is dominated by BlackRock, Vanguard, and State Street, which we call the “Big Three.” We compre- hensively map the ownership of the Big Three in the United States and find that together they constitute the largest shareholder in 88 percent of the S&P 500 firms. In contrast to active funds, the Big Three hold relatively illiquid and perma- nent ownership positions. This has led to opposing views on incentives and pos- sibilities to actively exert shareholder power. Some argue passive investors have little shareholder power because they cannot “exit,” while others point out this gives them stronger incentives to actively influence corporations. Through an anal- ysis of proxy vote records we find that the Big Three do utilize coordinated voting strategies and hence follow a centralized corporate governance strategy. However, they generally vote with management, except at director (re-)elections. Moreover, the Big Three may exert “hidden power” through two channels: First, via private engagements with management of invested companies; and second, because company executives could be prone to internalizing the objectives of the Big Three. We discuss how this development entails new forms of financial risk. |
van Veen, K; Heemskerk, E M Interlocking Directorate Networks Journal Article Encyclopedia of Social Network Analysis and Mining, pp. 1-6, 2017, ISBN: 978-1-4614-7163-9. Abstract | Links | BibTeX | Tags: @article{Veen, title = {Interlocking Directorate Networks}, author = {K van Veen and E M Heemskerk}, url = {https://link.springer.com/referenceworkentry/10.1007/978-1-4614-7163-9_274-1}, doi = {10.1007/978-1-4614-7163-9_274-1}, isbn = {978-1-4614-7163-9}, year = {2017}, date = {2017-03-17}, journal = {Encyclopedia of Social Network Analysis and Mining}, pages = {1-6}, abstract = {Since the emergence of the modern corporation in the nineteenth century, managerial power has been in the hands of a relatively small group of people, often referred to as the business elite. Within this group, a substantial number of in- dividuals sit on the board of directors of mul- tiple companies. By combining multiple board positions, these individuals create “interlocking directorates” between companies. As a result, they can – potentially – coordinate management decisions, share information and practices, and enforce norms in different company contexts. This concentration of economic power in the hands of a few and its manifestation in extensive networks of interlocking directorates led to a sig- nificant set of studies on business elites beginning in the early twentieth century. Questions include the nature and delineation of the business elite and the causes and consequences of this phe- nomenon for the company and its stakeholders (e.g., Mizruchi 1996). The set of companies, directors, and their link- ages form an “affiliation” or “two-mode” network from which a “one-mode” company-by-company network and a director-by-director network can be induced. These networks can be seen as a reflection of economic power structures and raise a variety of different questions which have been approached with different perspectives and by applying different network analyses.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Since the emergence of the modern corporation in the nineteenth century, managerial power has been in the hands of a relatively small group of people, often referred to as the business elite. Within this group, a substantial number of in- dividuals sit on the board of directors of mul- tiple companies. By combining multiple board positions, these individuals create “interlocking directorates” between companies. As a result, they can – potentially – coordinate management decisions, share information and practices, and enforce norms in different company contexts. This concentration of economic power in the hands of a few and its manifestation in extensive networks of interlocking directorates led to a sig- nificant set of studies on business elites beginning in the early twentieth century. Questions include the nature and delineation of the business elite and the causes and consequences of this phe- nomenon for the company and its stakeholders (e.g., Mizruchi 1996). The set of companies, directors, and their link- ages form an “affiliation” or “two-mode” network from which a “one-mode” company-by-company network and a director-by-director network can be induced. These networks can be seen as a reflection of economic power structures and raise a variety of different questions which have been approached with different perspectives and by applying different network analyses. |
Shenkar, C Regulatory Cooperation and Conflict: Regulating Systemic Risk in the Asset Management Industry Online 2017. Abstract | Links | BibTeX | Tags: @online{regulatory, title = {Regulatory Cooperation and Conflict: Regulating Systemic Risk in the Asset Management Industry}, author = {C Shenkar}, url = {http://corpnet.uva.nl/wp-content/uploads/International-regulatory-cooperation-on-systematically-important-financial-institutions-jurisdictional-scope.pdf}, year = {2017}, date = {2017-02-13}, abstract = {This brief reviews the legal powers allocated to designated authorities to regulate the asset management industry in three ‘jurisdictions’. It focuses on the powers of different government bodies to designate and regulate potential systemic risk posed by systematically important financial institutions; and in particular, by nonbank non-insurer asset management companies. By explaining the different regulatory structures, this brief outlines the institutional architecture entrusted to maintain national and international financial stability.}, keywords = {}, pubstate = {published}, tppubtype = {online} } This brief reviews the legal powers allocated to designated authorities to regulate the asset management industry in three ‘jurisdictions’. It focuses on the powers of different government bodies to designate and regulate potential systemic risk posed by systematically important financial institutions; and in particular, by nonbank non-insurer asset management companies. By explaining the different regulatory structures, this brief outlines the institutional architecture entrusted to maintain national and international financial stability. |
Shenkar, C Horizontal minority shareholdings in the EU, US, UK and Germany: Applicable Legal Framework Online 2017. Abstract | Links | BibTeX | Tags: @online{horizontal, title = {Horizontal minority shareholdings in the EU, US, UK and Germany: Applicable Legal Framework}, author = {C Shenkar}, url = {http://corpnet.uva.nl/wp-content/uploads/Horizontal-minority-shareholdings-applicable-legal-framework-in-four-jurisdictions.pdf}, year = {2017}, date = {2017-01-07}, abstract = {The practice of cross-ownership in competing firms by institutional investors has grown significantly in recent years. Such cross ownership is said to result in anticompetitive effects in concentrated industries. One possibility to regulate this activity, thus, is antitrust regulation. This brief presents an initial review of current antitrust/competition regulatory framework in four jurisdictions: the EU, US, UK and Germany.}, keywords = {}, pubstate = {published}, tppubtype = {online} } The practice of cross-ownership in competing firms by institutional investors has grown significantly in recent years. Such cross ownership is said to result in anticompetitive effects in concentrated industries. One possibility to regulate this activity, thus, is antitrust regulation. This brief presents an initial review of current antitrust/competition regulatory framework in four jurisdictions: the EU, US, UK and Germany. |
Brinkmann, G G; Rietveld, K F D; Takes, F W Exploiting GPUs for Fast Force-Directed Visualization of Large-Scale Networks Journal Article Proceedings of the 46th International Conference on Parallel Processing (ICPP), pp. 382-391, 2017. Abstract | Links | BibTeX | Tags: @article{GPU, title = {Exploiting GPUs for Fast Force-Directed Visualization of Large-Scale Networks}, author = {G G Brinkmann and K F D Rietveld and F W Takes}, url = {http://ieeexplore.ieee.org/document/8025312/}, doi = {10.1109/ICPP.2017.47}, year = {2017}, date = {2017-00-00}, journal = {Proceedings of the 46th International Conference on Parallel Processing (ICPP)}, pages = {382-391}, abstract = {Network analysis software relies on graph layout algorithms to enable users to visually explore network data. Nowadays, networks easily consist of millions of nodes and edges, resulting in hours of computation time to obtain a readable graph layout on a typical workstation. Although these machines usually do not have a very large number of CPU cores, they can easily be equipped with Graphics Processing Units (GPUs), opening up the possibility of exploiting hundreds or even thousands of cores to counter the aforementioned computational challenges. In this paper we introduce a novel GPU framework for visualizing large real-world network data. The main focus is on a GPU implementation of force-directed graph layout algorithms, which are known to create high quality network visualizations. The proposed framework is used to parallelize the well-known ForceAtlas2 algorithm, which is widely used in many popular network analysis packages and toolkits. The different procedures and data structures of the algorithm are adjusted to the CUDA GPU architecture's specifics in terms of memory coalescing, shared memory usage and thread workload balance. To evaluate its performance, the GPU implementation is tested using a diverse set of 38 different large-scale real-world networks. This allows for a thorough characterization of the parallelizable components of both force-directed layout algorithms in general as well as the proposed GPU framework as a whole. Experiments demonstrate how the approach can efficiently process very large real-world networks, showing overall speedup factors between 40x and 123x compared to existing CPU implementations. In practice, this means that a network with 4 million nodes and 120 million edges can be visualized in 14 minutes rather than 9 hours.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Network analysis software relies on graph layout algorithms to enable users to visually explore network data. Nowadays, networks easily consist of millions of nodes and edges, resulting in hours of computation time to obtain a readable graph layout on a typical workstation. Although these machines usually do not have a very large number of CPU cores, they can easily be equipped with Graphics Processing Units (GPUs), opening up the possibility of exploiting hundreds or even thousands of cores to counter the aforementioned computational challenges. In this paper we introduce a novel GPU framework for visualizing large real-world network data. The main focus is on a GPU implementation of force-directed graph layout algorithms, which are known to create high quality network visualizations. The proposed framework is used to parallelize the well-known ForceAtlas2 algorithm, which is widely used in many popular network analysis packages and toolkits. The different procedures and data structures of the algorithm are adjusted to the CUDA GPU architecture's specifics in terms of memory coalescing, shared memory usage and thread workload balance. To evaluate its performance, the GPU implementation is tested using a diverse set of 38 different large-scale real-world networks. This allows for a thorough characterization of the parallelizable components of both force-directed layout algorithms in general as well as the proposed GPU framework as a whole. Experiments demonstrate how the approach can efficiently process very large real-world networks, showing overall speedup factors between 40x and 123x compared to existing CPU implementations. In practice, this means that a network with 4 million nodes and 120 million edges can be visualized in 14 minutes rather than 9 hours. |
2016 |
Huijzer, M J Delineating-the-Corporate-Elite: Inquiring the Boundaries and Compositions of Interlocking Directorate Networks Masters Thesis University of Amsterdam, 2016. Abstract | Links | BibTeX | Tags: @mastersthesis{Jouke, title = {Delineating-the-Corporate-Elite: Inquiring the Boundaries and Compositions of Interlocking Directorate Networks}, author = {M J Huijzer}, url = {https://corpnet.uva.nl/huijzer__jouke_rmss/}, year = {2016}, date = {2016-12-00}, school = {University of Amsterdam}, abstract = {Researchers of corporate elites typically study samples of directors and executives comprising, say 50, 100, 200 or 500 largest firms within a particular region. While these studies have revealed important patterns of corporate elite organization, the demarcating criteria of the group under study are rather arbitrary and poorly linked to the concepts that designate the group. This is problematic because decisions for demarcating the group under study likely affect empirical outcomes and thus impair a comprehensive understanding of the corporate elite, especially when they are compared over space and time. This essay advances our understanding of corporate elites, both theoretically and empirically. Theoretically I first specify the corporate elite conceptually by distinguishing between foundational determinants and organizational determinants of the corporate elite. The organizational determinants refer to those factors that bind the elite together regardless of the societal domain or point in time. The foundational determinants refer to the sources which corporate elites derive their power or elite status from in the first place – i.e. the corporations they control or possess. I argue that a meaningful demarcation of the corporate elite considers both types of determinants when deciding which group should be studied. This argument is empirically supported by two analyses. First, I demonstrate that the various conventional, often arbitrary chosen demarcations (or sampling criteria) can significantly affect empirical analyses and the conclusions drawn from it. Second, I explore alternative sampling strategies that account for both, foundational and organizational determinants of the corporate elite. I show that compared to conventional demarcations, our alternative strategy performs equally well at delineating a corporate elite that is connected and willing to promote its group interests. The findings enhance a more robust understanding of corporate elite organization and facilitate better comparisons of corporate elite networks over space and time.}, keywords = {}, pubstate = {published}, tppubtype = {mastersthesis} } Researchers of corporate elites typically study samples of directors and executives comprising, say 50, 100, 200 or 500 largest firms within a particular region. While these studies have revealed important patterns of corporate elite organization, the demarcating criteria of the group under study are rather arbitrary and poorly linked to the concepts that designate the group. This is problematic because decisions for demarcating the group under study likely affect empirical outcomes and thus impair a comprehensive understanding of the corporate elite, especially when they are compared over space and time. This essay advances our understanding of corporate elites, both theoretically and empirically. Theoretically I first specify the corporate elite conceptually by distinguishing between foundational determinants and organizational determinants of the corporate elite. The organizational determinants refer to those factors that bind the elite together regardless of the societal domain or point in time. The foundational determinants refer to the sources which corporate elites derive their power or elite status from in the first place – i.e. the corporations they control or possess. I argue that a meaningful demarcation of the corporate elite considers both types of determinants when deciding which group should be studied. This argument is empirically supported by two analyses. First, I demonstrate that the various conventional, often arbitrary chosen demarcations (or sampling criteria) can significantly affect empirical analyses and the conclusions drawn from it. Second, I explore alternative sampling strategies that account for both, foundational and organizational determinants of the corporate elite. I show that compared to conventional demarcations, our alternative strategy performs equally well at delineating a corporate elite that is connected and willing to promote its group interests. The findings enhance a more robust understanding of corporate elite organization and facilitate better comparisons of corporate elite networks over space and time. |
Fichtner, J Network analysis shows offshore finance as a complex network of ownership ties Online LSE Business Review 2016. Abstract | Links | BibTeX | Tags: @online{LSEblog, title = {Network analysis shows offshore finance as a complex network of ownership ties}, author = {J Fichtner}, url = {http://blogs.lse.ac.uk/businessreview/2016/10/07/network-analysis-shows-offshore-finance-as-a-complex-network-of-ownership-ties/}, year = {2016}, date = {2016-10-07}, organization = {LSE Business Review}, abstract = {The EU made a move in August to force Apple to pay €13 billion in unpaid taxes. The episode has quickly become emblematic of the EU’s fight against corporate tax avoidance, a dispute which intensified in the aftermath of the 2009 financial crisis. As Europeans see it, this is about the need to provide a level playing field between US and EU businesses. If a UK-based retailer pays a lot more taxes than US-based Amazon, it will never be able to compete fairly. The OECD, “the organisation charged by the G8 and more recently the G20 to develop international standards as part of the fight against tax avoidance and evasion” saw its ambitions watered down after intense political pressure. In this article, CORPNET’s network analysis allows us to visualise how multinational corporations structure their ownership ties, a key element in tax avoidance.}, keywords = {}, pubstate = {published}, tppubtype = {online} } The EU made a move in August to force Apple to pay €13 billion in unpaid taxes. The episode has quickly become emblematic of the EU’s fight against corporate tax avoidance, a dispute which intensified in the aftermath of the 2009 financial crisis. As Europeans see it, this is about the need to provide a level playing field between US and EU businesses. If a UK-based retailer pays a lot more taxes than US-based Amazon, it will never be able to compete fairly. The OECD, “the organisation charged by the G8 and more recently the G20 to develop international standards as part of the fight against tax avoidance and evasion” saw its ambitions watered down after intense political pressure. In this article, CORPNET’s network analysis allows us to visualise how multinational corporations structure their ownership ties, a key element in tax avoidance. |
Hogan, N Passive owners: A Discussion of Index Funds Weak Response to Advantaged Ownership Positions Masters Thesis University of Amsterdam, 2016. Abstract | Links | BibTeX | Tags: @mastersthesis{Hogan, title = {Passive owners: A Discussion of Index Funds Weak Response to Advantaged Ownership Positions}, author = {N Hogan}, url = {https://corpnet.uva.nl/passive-owners/}, year = {2016}, date = {2016-08-18}, school = {University of Amsterdam}, abstract = {Index funds seem similar to mutual funds in their structure and size, yet they vote on the direction corporations take in strikingly different ways. This study sought to see if index fund power over the firm being voted could be the reason behind the differences in observed voting behaviour. Index funds are unusually passive owners of firms, despite a growing narrative formed by case studies and media speculation that would predict the contrary. This finding is reached by analysing index fund proxy voting power as the power to coerce firms to comply with their agenda. Incentives to act and the power to act are two sides of the same coin, and this study aims to examine the often-overlooked questions of power. This study analyses 985,000 proxy votes from Mutual and Index funds to find substantial differences in voting behaviour when a fund is in possession of greater power. Mutual funds are fundamentally more responsive to this fact, while Index funds remain essentially unchanged in their voting behaviour regardless of their chances to win a vote. Index funds are passive investors but also passive owners.}, keywords = {}, pubstate = {published}, tppubtype = {mastersthesis} } Index funds seem similar to mutual funds in their structure and size, yet they vote on the direction corporations take in strikingly different ways. This study sought to see if index fund power over the firm being voted could be the reason behind the differences in observed voting behaviour. Index funds are unusually passive owners of firms, despite a growing narrative formed by case studies and media speculation that would predict the contrary. This finding is reached by analysing index fund proxy voting power as the power to coerce firms to comply with their agenda. Incentives to act and the power to act are two sides of the same coin, and this study aims to examine the often-overlooked questions of power. This study analyses 985,000 proxy votes from Mutual and Index funds to find substantial differences in voting behaviour when a fund is in possession of greater power. Mutual funds are fundamentally more responsive to this fact, while Index funds remain essentially unchanged in their voting behaviour regardless of their chances to win a vote. Index funds are passive investors but also passive owners. |
Takes, F W Network science shows London is at the heart of the world’s corporate elite Online LSE Business Review 2016. Abstract | Links | BibTeX | Tags: @online{LSEFrank, title = {Network science shows London is at the heart of the world’s corporate elite}, author = {F W Takes}, url = {http://blogs.lse.ac.uk/businessreview/2016/07/15/network-science-shows-london-is-at-the-heart-of-the-worlds-corporate-elite/}, year = {2016}, date = {2016-07-15}, organization = {LSE Business Review}, abstract = {In this blog article, we investigate the position of the UK within the global corporate elite network. Firms are not individual market actors, but are typically embedded in dense networks of power and control, for example based on ownership or interlocking directorates. The CORPNET research group at the University of Amsterdam studies these networks as part of a five-year research programme funded by the European Research Council (ERC). The general idea behind the group’s so-called “network science“ approach is that by studying a system of interaction (the global economy) rather than mere sums and averages of the systems’s individuals (economic activity and behaviour of corporations/countries), we obtain new insights in the considered system.}, keywords = {}, pubstate = {published}, tppubtype = {online} } In this blog article, we investigate the position of the UK within the global corporate elite network. Firms are not individual market actors, but are typically embedded in dense networks of power and control, for example based on ownership or interlocking directorates. The CORPNET research group at the University of Amsterdam studies these networks as part of a five-year research programme funded by the European Research Council (ERC). The general idea behind the group’s so-called “network science“ approach is that by studying a system of interaction (the global economy) rather than mere sums and averages of the systems’s individuals (economic activity and behaviour of corporations/countries), we obtain new insights in the considered system. |
Fichtner, J Perpetual decline or persistent dominance? Uncovering Anglo-America’s true structural power in global finance Journal Article Review of International Studies, 43 (1), pp. 3-28, 2016. Abstract | Links | BibTeX | Tags: @article{Anglo-America, title = {Perpetual decline or persistent dominance? Uncovering Anglo-America’s true structural power in global finance}, author = {J Fichtner}, url = {https://www.cambridge.org/core/journals/review-of-international-studies/article/perpetual-decline-or-persistent-dominance-uncovering-angloamericas-true-structural-power-in-global-finance/75536FC7435F72FC9AB4968D0509F019}, doi = {10.1017/S0260210516000206}, year = {2016}, date = {2016-06-29}, journal = {Review of International Studies}, volume = {43}, number = {1}, pages = {3-28}, abstract = {The prediction of America’s decline is a regularly recurring phenomenon; this also pertains to the pivotal field of global finance. This article argues that, first we have to consider the United States together with the other Anglophone countries. The English-speaking countries and territories – Anglo-America – have deep common political and socioeconomic roots, of which the unique global Five Eyes intelligence cooperation is merely one manifestation. In finance, New York and London (NY-LON) constitute the decision-making core of this transnational formation. Second, to analyse the highly complex phenomenon of structural power in the globalised international political economy we have to dig deeper to uncover truly meaningful data. Thus, this article evaluates data for nine central segments of global finance from around the year 2000 to 2014. Contrary to the assertions of many declinists, these data show that Anglo-America’s dominant structural power has been persistent during this period. Moreover, four novel visualisations show that the US-UK axis is the fulcrum of the international financial system. However, contemporary global finance is characterised by a high degree of latent fragility; significant imbalances, inequalities and contradictions persist and are even likely to grow, potentially undermining the legitimacy and the stability of the whole system.}, keywords = {}, pubstate = {published}, tppubtype = {article} } The prediction of America’s decline is a regularly recurring phenomenon; this also pertains to the pivotal field of global finance. This article argues that, first we have to consider the United States together with the other Anglophone countries. The English-speaking countries and territories – Anglo-America – have deep common political and socioeconomic roots, of which the unique global Five Eyes intelligence cooperation is merely one manifestation. In finance, New York and London (NY-LON) constitute the decision-making core of this transnational formation. Second, to analyse the highly complex phenomenon of structural power in the globalised international political economy we have to dig deeper to uncover truly meaningful data. Thus, this article evaluates data for nine central segments of global finance from around the year 2000 to 2014. Contrary to the assertions of many declinists, these data show that Anglo-America’s dominant structural power has been persistent during this period. Moreover, four novel visualisations show that the US-UK axis is the fulcrum of the international financial system. However, contemporary global finance is characterised by a high degree of latent fragility; significant imbalances, inequalities and contradictions persist and are even likely to grow, potentially undermining the legitimacy and the stability of the whole system. |
Mokken, R J; Heemskerk, E M; Laan, S Close communication and 2-clubs in corporate networks: Europe 2010 Journal Article Social Network Analysis and Mining, 6 (1: Article 40), 2016. Abstract | Links | BibTeX | Tags: @article{Europe2010, title = {Close communication and 2-clubs in corporate networks: Europe 2010}, author = {R J Mokken and E M Heemskerk and S Laan}, url = {https://link.springer.com/article/10.1007/s13278-016-0345-x}, doi = {10.1007/s13278-016-0345-x}, year = {2016}, date = {2016-06-22}, journal = {Social Network Analysis and Mining}, volume = {6}, number = {1: Article 40}, abstract = {Corporate networks, as induced by interlocking directorates between corporations, provide structures of personal communication between their boards. This paper studies such networks using the framework of a previous paper by Laan et al. (Soc Netw Anal Min, 2016. doi:10.1007/s13278-016-0326-0) where close communication is defined by sub-networks, so that each pair of nodes (boards of a corporation) are either neighbours or have at least one common neighbour. These correspond to sub-graphs of diameter at most 2, designated by us earlier as 2-clubs of three types (coteries, social circles and hamlets), and conform three levels of close communication in social networks. They are all contained within the disjoint boroughs of a network, supercommunities which envelope all close communication between nodes of a network. This framework is applied here to an analysis of corporate board interlocks between the top 300 European corporations 2010, using the data from an earlier study by one of us (Heemskerk in Econ Soc 42:74–101, 2013). While the results corroborate the main findings of the earlier studies, our approach also uncovers additional, thus far unrevealed patterns. A single dominant European borough with the Francophone network as its centre and that of Germany only regionally and internally connected. The UK business elite on the other hand is very present and prominent in this European structure of corporate close communication.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Corporate networks, as induced by interlocking directorates between corporations, provide structures of personal communication between their boards. This paper studies such networks using the framework of a previous paper by Laan et al. (Soc Netw Anal Min, 2016. doi:10.1007/s13278-016-0326-0) where close communication is defined by sub-networks, so that each pair of nodes (boards of a corporation) are either neighbours or have at least one common neighbour. These correspond to sub-graphs of diameter at most 2, designated by us earlier as 2-clubs of three types (coteries, social circles and hamlets), and conform three levels of close communication in social networks. They are all contained within the disjoint boroughs of a network, supercommunities which envelope all close communication between nodes of a network. This framework is applied here to an analysis of corporate board interlocks between the top 300 European corporations 2010, using the data from an earlier study by one of us (Heemskerk in Econ Soc 42:74–101, 2013). While the results corroborate the main findings of the earlier studies, our approach also uncovers additional, thus far unrevealed patterns. A single dominant European borough with the Francophone network as its centre and that of Germany only regionally and internally connected. The UK business elite on the other hand is very present and prominent in this European structure of corporate close communication. |
Takes, F W; Heemskerk, E M Brexit en de verdeeldheid van het Britse Old Boys netwerk Online Stuk Rood Vlees 2016. Abstract | Links | BibTeX | Tags: @online{SRV, title = {Brexit en de verdeeldheid van het Britse Old Boys netwerk}, author = {F W Takes and E M Heemskerk}, url = {http://stukroodvlees.nl/brexit-verdeeldheid-britse-old-boys-netwerk/}, year = {2016}, date = {2016-06-22}, organization = {Stuk Rood Vlees}, abstract = {Morgen stemt de Britse kiezer: blijven ze in de Europese Unie, of gaan ze toch liever zelfstandig verder? Hoewel het onwaarschijnlijk is dat sommige van de doemscenario’s die worden geschetst werkelijkheid zullen worden, is het zeker dat Brexit verregaande gevolgen zal hebben voor de wereldwijde geopolitieke en economische verhoudingen.}, keywords = {}, pubstate = {published}, tppubtype = {online} } Morgen stemt de Britse kiezer: blijven ze in de Europese Unie, of gaan ze toch liever zelfstandig verder? Hoewel het onwaarschijnlijk is dat sommige van de doemscenario’s die worden geschetst werkelijkheid zullen worden, is het zeker dat Brexit verregaande gevolgen zal hebben voor de wereldwijde geopolitieke en economische verhoudingen. |
Takes, F W; Heemskerk, E M Centrality in the Global Network of Corporate Control Journal Article Social Network Analysis and Mining, 6 (1: Article 97), 2016. Abstract | Links | BibTeX | Tags: @article{Centrality, title = {Centrality in the Global Network of Corporate Control}, author = {F W Takes and E M Heemskerk}, url = {http://arxiv.org/abs/1605.08197}, doi = {10.1007/s13278-016-0402-5}, year = {2016}, date = {2016-05-22}, journal = {Social Network Analysis and Mining}, volume = {6}, number = {1: Article 97}, abstract = {Corporations across the world are highly interconnected in a large global network of corporate control. This paper investigates the global board interlock network, covering 400,000 firms linked through 1,700,000 edges representing shared directors between these firms. The main focus is on the concept of centrality, which is used to investigate the embeddedness of firms from a particular country within the global network. The study results in three contributions. First, to the best of our knowledge for the first time we can investigate the topology as well as the concept of centrality in corporate networks at a global scale, allowing for the largest cross-country comparison ever done in interlocking directorates literature. We demonstrate, amongst other things, extremely similar network topologies, yet large differences between countries when it comes to the relation between economic prominence indicators and firm centrality. Second, we introduce two new metrics that are specifically suitable for comparing the centrality ranking of a partition to that of the full network. Using the notion of centrality persistence we propose to measure the persistence of a partition's centrality ranking in the full network. In the board interlock network, it allows us to assess the extent to which the footprint of a national network is still present within the global network. Next, the measure of centrality ranking dominance tells us whether a partition (country) is more dominant at the top or the bottom of the centrality ranking of the full (global) network. Finally, comparing these two new measures of persistence and dominance between different countries allows us to classify these countries based the their embeddedness, measured using the relation between the centrality of a country's firms on the national and the global scale of the board interlock network.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Corporations across the world are highly interconnected in a large global network of corporate control. This paper investigates the global board interlock network, covering 400,000 firms linked through 1,700,000 edges representing shared directors between these firms. The main focus is on the concept of centrality, which is used to investigate the embeddedness of firms from a particular country within the global network. The study results in three contributions. First, to the best of our knowledge for the first time we can investigate the topology as well as the concept of centrality in corporate networks at a global scale, allowing for the largest cross-country comparison ever done in interlocking directorates literature. We demonstrate, amongst other things, extremely similar network topologies, yet large differences between countries when it comes to the relation between economic prominence indicators and firm centrality. Second, we introduce two new metrics that are specifically suitable for comparing the centrality ranking of a partition to that of the full network. Using the notion of centrality persistence we propose to measure the persistence of a partition's centrality ranking in the full network. In the board interlock network, it allows us to assess the extent to which the footprint of a national network is still present within the global network. Next, the measure of centrality ranking dominance tells us whether a partition (country) is more dominant at the top or the bottom of the centrality ranking of the full (global) network. Finally, comparing these two new measures of persistence and dominance between different countries allows us to classify these countries based the their embeddedness, measured using the relation between the centrality of a country's firms on the national and the global scale of the board interlock network. |