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A Multiple Network Approach to Corporate Governance

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Listed:
  • Fausto Bonacina
  • Marco D'Errico
  • Enrico Moretto
  • Silvana Stefani
  • Anna Torriero

Abstract

In this work, we consider Corporate Governance (CG) ties among companies from a multiple network perspective. Such a structure naturally arises from the close interrelation between the Shareholding Network (SH) and the Board of Directors network (BD). In order to capture the simultaneous effects of both networks on CG, we propose to model the CG multiple network structure via tensor analysis. In particular, we consider the TOPHITS model, based on the PARAFAC tensor decomposition, to show that tensor techniques can be successfully applied in this context. By providing some empirical results from the Italian financial market in the univariate case, we then show that a tensor--based multiple network approach can reveal important information.

Suggested Citation

  • Fausto Bonacina & Marco D'Errico & Enrico Moretto & Silvana Stefani & Anna Torriero, 2014. "A Multiple Network Approach to Corporate Governance," Papers 1401.4387, arXiv.org, revised May 2014.
  • Handle: RePEc:arx:papers:1401.4387
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    References listed on IDEAS

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    1. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    2. 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.
    3. Grassi, Rosanna, 2010. "Vertex centrality as a measure of information flow in Italian Corporate Board Networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(12), pages 2455-2464.
    4. M. D'Errico & R. Grassi & S. Stefani & A. Torriero, 2009. "Shareholding Networks and Centrality: An Application to the Italian Financial Market," Lecture Notes in Economics and Mathematical Systems, in: Ahmad K. Naimzada & Silvana Stefani & Anna Torriero (ed.), Networks, Topology and Dynamics, pages 215-228, Springer.
    5. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521674096, January.
    6. 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.
    7. Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
    8. Bianco, Magda & Casavola, Paola, 1999. "Italian corporate governance:: Effects on financial structure and firm performance," European Economic Review, Elsevier, vol. 43(4-6), pages 1057-1069, April.
    9. 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.
    10. Vega-Redondo,Fernando, 2007. "Complex Social Networks," Cambridge Books, Cambridge University Press, number 9780521857406, January.
    11. Andrea Melis, 2006. "Corporate Governance Developments in Italy," Chapters, in: Christine A. Mallin (ed.), Handbook on International Corporate Governance, chapter 4, Edward Elgar Publishing.
    12. Andrea Melis, 2000. "Corporate Governance in Italy," Corporate Governance: An International Review, Wiley Blackwell, vol. 8(4), pages 347-355, October.
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    2. An Zeng & Stefano Battiston, 2016. "The Multiplex Network of EU Lobby Organizations," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-15, October.

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