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Centralization of capital and financial crisis: A global network analysis of corporate control

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  • Brancaccio, Emiliano
  • Giammetti, Raffaele
  • Lopreite, Milena
  • Puliga, Michelangelo

Abstract

Neither the existence of a global tendency toward the centralization of capital as theorized by Marx nor the possible links between economic crisis and capital centralization have been verified by empirical studies. Using techniques of complex network analysis applied to the Thomson Reuters Eikon database we introduce a definition of centralization as network control and present a first study of its global evolution from 2001 to 2016. We find that the global network control is highly centralized: the fraction of the top holders cumulatively holding the 80% of the global economic value of the companies examined does never exceed 2%. Furthermore, by inspecting the temporal dynamics of the phenomenon we observe a relevant increase in the centralization of capital: this trend assumes a more regular and general character since the financial crisis started in 2007, with a growth of more than 20%.

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  • Brancaccio, Emiliano & Giammetti, Raffaele & Lopreite, Milena & Puliga, Michelangelo, 2018. "Centralization of capital and financial crisis: A global network analysis of corporate control," Structural Change and Economic Dynamics, Elsevier, vol. 45(C), pages 94-104.
    • Handle: RePEc:eee:streco:v:45:y:2018:i:c:p:94-104
    DOI: 10.1016/j.strueco.2018.03.001
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    Cited by:

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    2. Takayuki Mizuno & Shohei Doi & Shuhei Kurizaki, 2020. "The power of corporate control in the global ownership network," PLOS ONE, Public Library of Science, vol. 15(8), pages 1-19, August.
    3. Nikolaos Th. Chatzarakis, 2021. "Revisiting the role and consequences of Econophysics from a Marxian perspective," Bulletin of Political Economy, Bulletin of Political Economy, vol. 15(1), pages 45-68, June.
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    6. Takayuki Mizuno & Shohei Doi & Takahiro Tsuchiya & Shuhei Kurizaki, 2021. "Socially responsible investing through the equity funds in the global ownership network," PLOS ONE, Public Library of Science, vol. 16(8), pages 1-22, August.
    7. Emiliano Brancaccio & Raffaele Giammetti & Milena Lopreite & Michelangelo Puliga, 2023. "Convergence in solvency and capital centralization: A B‐VAR analysis for high‐income and euro area countries," Metroeconomica, Wiley Blackwell, vol. 74(1), pages 40-73, February.
    8. Piotr Łasak & Sławomir Wyciślak, 2022. "Dynamics in Complex Systems Amidst Crisis 2008+: Financial Regulatory and Supervisory Reflections," Risks, MDPI, vol. 10(2), pages 1-15, February.
    9. Emiliano Brancaccio & Domenico Suppa, 2018. "The “Solvency Rule†of the Central Banker in a Monetary Scheme of Reproduction," Bulletin of Political Economy, Bulletin of Political Economy, vol. 12(1-2), pages 77-98, June.
    10. Emiliano Brancaccio, 2019. "Sulle condizioni per una rivoluzione della teoria e della politica economica (On the conditions for a revolution of economic theory and policy)," Moneta e Credito, Economia civile, vol. 72(287), pages 197-206.

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    More about this item

    Keywords

    Network analysis; Capital centralization; Concentration; Financial crisis; Top holders holding; Ownership and control structures; Marx; Laws of tendency;
    All these keywords.

    JEL classification:

    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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