Corporations across the world are highly interconnected in a large global network of corporate control. This paper investigates the global board interlock network, covering 400,000 firms linked through 1,700,000 edges representing shared directors between these firms. The main focus is on the concept of centrality, which is used to investigate the embeddedness of firms from a particular country within the global network. The study results in three contributions. First, to the best of our knowledge for the first time we can investigate the topology as well as the concept of centrality in corporate networks at a global scale, allowing for the largest cross-country comparison ever done in interlocking directorates literature. We demonstrate, among other things, extremely similar network topologies, yet large differences between countries when it comes to the relation between economic prominence indicators and firm centrality. Second, we introduce two new metrics that are specifically suitable for comparing the centrality ranking of a partition to that of the full network. Using the notion of centrality persistence we propose to measure the persistence of a partition’s centrality ranking in the full network. In the board interlock network, it allows us to assess the extent to which the footprint of a national network is still present within the global network. Next, the measure of centrality ranking dominance tells us whether a partition (country) is more dominant at the top or the bottom of the centrality ranking of the full (global) network. Finally, comparing these two new measures of persistence and dominance between different countries allows us to classify these countries based the their embeddedness, measured using the relation between the centrality of a country’s firms on the national and the global scale of the board interlock network.
Traditional economic theory could not explain, much less predict, the near collapse of the financial system and its long-lasting effects on the global economy. Since the 2008 crisis, there has been increasing interest in using ideas from complexity theory to make sense of economic and financial markets. Concepts, such as tipping points, networks, contagion, feedback, and resilience have entered the financial and regulatory lexicon, but actual use of complexity models and results remains at an early stage. Recent insights and techniques offer potential for better monitoring and management of highly interconnected economic and financial systems and, thus, may help anticipate and manage future crises. Trade requires search, negotiation, and exchange, which are activities that absorb resources. This paper investigates how different trade networks attend to these activities. An artificial market is constructed in which autonomous agents endowed with a stock of goods seek out partners, negotiate a price, and then trade with the agent offering the best deal. Different trade networks are imposed on the system by restricting the set of individuals with whom an agent can communicate. We then compare the path to the eventual equilibrium as well as the equilibrium characteristics of each trade network to see how each system dealt with the tasks of search, negotiation, and exchange. Initially, all agents are free to trade with any individual in the global market. In such a world, global resources are optimally allocated with few trades, but only after a tremendous amount of search and negotiation. If trade is restricted within disjoint local boundaries, search is simple but global efficiency elusive. However, a hybrid model in which most agents trade locally but a few agents trade globally results in an economy that quickly reaches a Pareto optimal equilibrium with significantly lower search and negotiation costs. Such small-world' networks occur in nature and may help explain the ease with which most of us acquire goods from around the world. We also show that there are private incentives for such a system to arise.  We investigate the community structure of the global ownership network of transnational corporations. We find a pronounced organization in communities that cannot be explained by randomness. Despite the global character of this network, communities reflect first of all the geographical location of firms, while the industrial sector plays only a marginal role. We also analyze the network in which the nodes are the communities and the links are obtained by aggregating the links among firms belonging to pairs of communities. We analyze the network centrality of the top 50 communities and we provide the first quantitative assessment of the financial sector role in connecting the global economy. The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that 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. The community structure of two real-world financial networks, namely the board network and the ownership network of the firms of the Italian Stock Exchange, is analyzed by means of the maximum modularity approach. The main result is that both networks exhibit a strong community structure and, moreover, that the two structures overlap significantly. This is due to a number of reasons, including the existence of pyramidal groups and directors serving in several boards. Overall, this means that the “small world” of listed companies is actually split into well identifiable “continents” (i.e., the communities).