Sunday, 20 November 2011

The network of global corporate control -

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Transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly knit core of financial institutions. This core can be seen as an economic “super-entity” that raises new important issues both for researchers and policy makers. A common intuition among scholars and in the media sees the global economy as being dominated by a handful of powerful transnational corporations (TNCs). Certainly, it is intuitive that every large corporation has a pyramid of subsidiaries below and a number of shareholders above. However, economic theory does not offer models that predict how TNCs globally connect to each other.

The so-called rich club phenomenon refers to the fact that in some complex networks the nodes with the highest degree tend to be connected among each other. Being based solely on node degree, rich club indices are not suitable for ownership networks, in which indirect and weighted paths matter.

Added by Zunia on November 20, 2011