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Interlocking directorates in Italy: persistent links in network dynamics

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  • Lucia Bellenzier
  • Rosanna Grassi

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Abstract

In this work we study the time evolution of interlocking directorates in Italy from 1998 to 2011 by means of dynamical networks. Our purpose is to assess if in Italy there is a connected and stable structure, due to the presence of directors with multiple mandates, like it happens in the German case. We find a very cohesive network structure, due to the presence of a few directors with multiple assignments and, unlike the German case, this structure is stable, but not connected. Moreover we propose an alternative approach to investigate the dynamics, based on temporal networks, in order to quantify the variation of links in a certain time period. We construct a unique cumulative network, where nodes are companies and the existence of an edge is related with the persistence in time of an interlock between two companies. This persistence is due on the one hand to the ownership of a few family firms, and on the other hand to cross-shareholdings between companies. To complete the analysis we also investigate whether the link stability results from the appointments of the same director or from the stepping in/out of different directors. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Lucia Bellenzier & Rosanna Grassi, 2014. "Interlocking directorates in Italy: persistent links in network dynamics," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 9(2), pages 183-202, October.
  • Handle: RePEc:spr:jeicoo:v:9:y:2014:i:2:p:183-202
    DOI: 10.1007/s11403-013-0119-8
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    References listed on IDEAS

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    1. Stephen P. Ferris & Murali Jagannathan & A. C. Pritchard, 2003. "Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments," Journal of Finance, American Finance Association, vol. 58(3), pages 1087-1112, June.
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    3. Alessandro Gambini & Emma Sarno & Alberto Zazzaro, 2012. "Composizione e struttura di rete tra le societa' quotate in Italia," Mo.Fi.R. Working Papers 63, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    4. Piccardi, Carlo & Calatroni, Lisa & Bertoni, Fabio, 2010. "Communities in Italian corporate networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(22), pages 5247-5258.
    5. Santella, Paolo & Drago, Carlo & Polo, Andrea, 2007. "The Italian Chamber of Lords Sits on Listed Company Boards: An Empirical Analysis of Italian Listed Company Boards from 1998 to 2006," MPRA Paper 2265, University Library of Munich, Germany.
    6. Hee-Jung Yeo & Christine Pochet & Alain Alcouffe, 2003. "CEO Reciprocal Interlocks in French Corporations," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 7(1), pages 87-108, March.
    7. Rinaldi, Alberto & Vasta, Michelanelo, 2005. "The Structure of Italian Capitalism, 1952 1972: New Evidence Using the Interlocking Directorates Technique," Financial History Review, Cambridge University Press, vol. 12(02), pages 173-198, October.
    8. S. Battiston & M. Catanzaro, 2004. "Statistical properties of corporate board and director networks," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 38(2), pages 345-352, March.
    9. Martin J. Conyon & Mark R. Muldoon, 2006. "The Small World of Corporate Boards," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(9-10), pages 1321-1343.
    10. Santella, Paolo & Drago, Carlo & Polo, Andrea & Gagliardi, Enrico, 2009. "A Comparison among the director networks in the main listed companies in France, Germany, Italy, and the United Kingdom," MPRA Paper 16397, University Library of Munich, Germany.
    11. Milaković, Mishael & Alfarano, Simone & Lux, Thomas, 2008. "The small core of the German corporate board network," Kiel Working Papers 1446, Kiel Institute for the World Economy (IfW).
    12. Milaković, Mishael & Raddant, Matthias & Birg, Laura, 2009. "Persistence of a network core in the time evolution of interlocking directorates," Economics Working Papers 2009-10, Christian-Albrechts-University of Kiel, Department of Economics.
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    Citations

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    Cited by:

    1. Leonardo Bargigli & Renato Giannetti, 2015. "The Italian Corporate System: SOEs, Private Firms and Institutions in a Network Perspective (1952-1983)," Working Papers - Economics wp2015_01.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    2. Drago, Carlo & Ricciuti, Roberto, 2017. "Communities detection as a tool to assess a reform of the Italian interlocking directorship network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 466(C), pages 91-104.
    3. Carlo Drago & Roberto Ricciuti, 2019. "Bootstrapping the Gini Index of the Network Degree: An Application for Italian Corporate Governance," Working Papers 05/2019, University of Verona, Department of Economics.
    4. repec:spr:jeicoo:v:12:y:2017:i:2:d:10.1007_s11403-015-0165-5 is not listed on IDEAS
    5. Matthias Raddant & Mishael Milaković & Laura Birg, 2017. "Persistence in corporate networks," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(2), pages 249-276, July.
    6. repec:kap:jmgtgv:v:22:y:2018:i:2:d:10.1007_s10997-017-9392-6 is not listed on IDEAS
    7. Drago, Carlo, 2015. "Exploring the Community Structure of Complex Networks," MPRA Paper 81024, University Library of Munich, Germany.
    8. repec:eee:phsmap:v:494:y:2018:i:c:p:367-379 is not listed on IDEAS
    9. repec:spr:jeicoo:v:13:y:2018:i:1:d:10.1007_s11403-017-0202-7 is not listed on IDEAS
    10. Drago, Carlo, 2015. "Exploring the Community Structure of Complex Networks," MPRA Paper 81024, University Library of Munich, Germany.
    11. Roy Cerqueti & Giulia Rotundo & Marcel Ausloos, 2018. "Investigating the configurations in cross-shareholding: a joint copula-entropy approach," Papers 1807.09346, arXiv.org.
    12. Sankowska, Anna & Siudak, Dariusz, 2016. "The small world phenomenon and assortative mixing in Polish corporate board and director networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 443(C), pages 309-315.
    13. Andrea Fracasso & Valentina Peruzzi & Chiara Tomasi, 2019. "Multiple banking relationships: the role of firm connectedness," DEM Working Papers 2019/3, Department of Economics and Management.
    14. Raddant, Matthias & Takahashi, Hiroshi, 2019. "The Japanese corporate board network," Kiel Working Papers 2130, Kiel Institute for the World Economy (IfW).

    More about this item

    Keywords

    Interlocking directorates; Temporal networks; Corporate governance; C02; D85; G30;

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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