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Corporate Networks in Europe and the United States

Author

Listed:
  • Windolf, Paul

    (University of Trier)

Abstract

Corporate networks form part of the institutional structure of markets and the business environment, enabling firms to coordinate their behaviour and regulate competition. Networks perform a number of economic functions: they reduce information asymmetries and uncertainty, and facilitate the redistribution of risk between banks, firms, and investors. Within these networks, firms collectively monitor one another and owners supervise their managers. Part One analyses comparative data on interlocking directorates and capital networks between the large corporations in six countries: Germany, Great Britain, France, the United States, Switzerland, and the Netherlands. The structure of corporate networks is shaped by the traditions, culture, and institutions of a country. The German corporate network, for instance, is highly centralized and includes almost all large corporations. The network in the United States, however, is decentralized and falls into a number of regional centres. Corporate networks may be considered as a configuration of firms that are connected to one another by managers (interlocks). Networks may also be considered as a configuration of managers who meet each other on the board of directors (network of the economic elite). The resources on which the dominance of the economic elite is based are bureaucratic power, property rights, and social capital. The top managers not only have a leading position within large corporations (bureaucratic power), they also represent the owner vis-a-vis the dependent firm on whose board they sit. Thus, bureaucratic control over a company is linked with property rights in the context of specific network configurations. These configurations vary between countries and lead to differing forms of managerial control in Germany, France, Britain, and the United States (Part Two of the book). Part Three concentrates on corporate networks and the structure of the market order in the transitional economies. The type of capitalism that is evolving in these countries in some ways resembles Western managerial capitalism, but with certain significant differences. Privatization created a relatively high concentration of ownership. There is no clear-cut separation of ownership and control, but rather a balance of power between managers and owners.

Suggested Citation

  • Windolf, Paul, 2002. "Corporate Networks in Europe and the United States," OUP Catalogue, Oxford University Press, number 9780199256976.
  • Handle: RePEc:oxp:obooks:9780199256976
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    Cited by:

    1. Jorge Rivera & Jennifer Oetzel & Peter deLeon & Mark Starik, 2009. "Business responses to environmental and social protection policies: toward a framework for analysis," Policy Sciences, Springer;Society of Policy Sciences, vol. 42(1), pages 3-32, February.
    2. Gurneeta Vasudeva & Jennifer W. Spencer & Hildy J. Teegen, 2013. "Bringing the Institutional Context Back In: A Cross-National Comparison of Alliance Partner Selection and Knowledge Acquisition," Organization Science, INFORMS, vol. 24(2), pages 319-338, April.
    3. Möbert, Jochen & Tydecks, Patrick, 2007. "Power and Ownership Structures among German Companies. A Network Analysis of Financial Linkages," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 35974, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    4. Sapinski, Jean Philippe & Carroll, William K., 2017. "Interlocking directorates and corporate networks," SocArXiv 7t8c9, Center for Open Science.
    5. Juan Antonio Rubio Mondéjar & Josean Garrués Irurzun, 2012. "Estructura corporativa e interlocking directorates en las mayores empresas españolas, 1917-1970," FEG Working Paper Series 01/12, Faculty of Economics and Business (University of Granada).
    6. Kathrin Johansen & Saskia Laser & Doris Neuberger & Ettore Andreani, 2017. "Inside or outside control of banks? Evidence from the composition of supervisory boards," European Journal of Law and Economics, Springer, vol. 43(1), pages 31-58, February.
    7. Gurneeta Vasudeva & Akbar Zaheer & Exequiel Hernandez, 2013. "The Embeddedness of Networks: Institutions, Structural Holes, and Innovativeness in the Fuel Cell Industry," Organization Science, INFORMS, vol. 24(3), pages 645-663, June.
    8. Julia Brennecke & Olaf N. Rank, 2017. "Tie heterogeneity in networks of interlocking directorates: a cost–benefit approach to firms’ tie choice," Business Research, Springer;German Academic Association for Business Research, vol. 10(1), pages 97-122, June.
    9. François, Pierre & Lemercier, Claire, 2014. "State or status capitalism? Some insights on french idiosyncrasis using an interlocking directorates approach," economic sociology_the european electronic newsletter, Max Planck Institute for the Study of Societies, vol. 15(2), pages 17-33.
    10. Davide Carbonai & Carlo Drago, 2015. "Positive Freedom in Networked Capitalism: An Empirical Analysis," Working Papers 2015.75, Fondazione Eni Enrico Mattei.
    11. Moebert, Jochen & Tydecks, Patrick, 2007. "Power and Ownership Structures among German Companies. A Network Analysis of Financial Linkages," Darmstadt Discussion Papers in Economics 179, Darmstadt University of Technology, Department of Law and Economics.
    12. Sudi Sudarsanam & Tim Broadhurst, 2012. "Corporate governance convergence in Germany through shareholder activism: Impact of the Deutsche Boerse bid for London Stock Exchange," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 16(2), pages 235-268, May.
    13. repec:dau:papers:123456789/5417 is not listed on IDEAS
    14. Carroll, William K. & Sapinski, Jean Philippe, 2017. "Corporate elites and intercorporate networks," SocArXiv 43w7s, Center for Open Science.
    15. Marc Goergen & Christine A. Mallin & Eve Mitleton-Kelly & Ahmed Al-Hawamdeh & Iris H-Y Chiu, 2010. "Corporate Governance and Complexity Theory," Books, Edward Elgar Publishing, number 13927, July.
    16. Braun, Matías & Briones, Ignacio & Islas, Gonzalo, 2019. "Interlocking directorates, access to credit, and business performance in Chile during early industrialization," Journal of Business Research, Elsevier, vol. 105(C), pages 381-388.
    17. Andreani, Ettore & Dummann, Kathrin & Neuberger, Doris, 2009. "Composition of supervisory boards in Germany: Inside or outside control of banks?," Thuenen-Series of Applied Economic Theory 103, University of Rostock, Institute of Economics.
    18. Aïssaoui, Rachida & Fabian, Frances, 2015. "The French Paradox: Implications for Variations in Global Convergence," Journal of International Management, Elsevier, vol. 21(1), pages 31-48.
    19. María Inés Barbero & Andrea Lluch & Andrea Lluch & Erica Salvaj & María Inés Barbero, 2014. "Corporate Networks and Business Groups in Argentina in the Early 1970s," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 54(2), pages 183-208, July.
    20. Schmid, Stefan & Wurster, Dennis J., 2017. "International work experience: Is it really accelerating the way to the management board of MNCs?," International Business Review, Elsevier, vol. 26(5), pages 991-1008.

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