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The community structure of the European network of interlocking directorates 2005-2010.

Heemskerk EM, Daolio F, Tomassini M - PLoS ONE (2013)

Bottom Line: Powerful community detection heuristics indicate that geography still plays an important role: there exist clear communities and they have a distinct national character.Nonetheless, from 2005 to 2010 we observe a densification of the boards interlocks network and a larger transnational orientation in its communities.Together with central actors and assortativity analyses, we provide statistical evidence that, at the level of corporate governance, Europe is getting closer.

View Article: PubMed Central - PubMed

Affiliation: Department of Political Science, University of Amsterdam, Amsterdam, The Netherlands.

ABSTRACT
The boards of directors at large European companies overlap with each other to a sizable extent both within and across national borders. This could have important economic, political and management consequences. In this work we study in detail the topological structure of the networks that arise from this phenomenon. Using a comprehensive information database, we reconstruct the implicit networks of shared directorates among the top 300 European firms in 2005 and 2010, and suggest a number of novel ways to explore the trans-nationality of such business elite networks. Powerful community detection heuristics indicate that geography still plays an important role: there exist clear communities and they have a distinct national character. Nonetheless, from 2005 to 2010 we observe a densification of the boards interlocks network and a larger transnational orientation in its communities. Together with central actors and assortativity analyses, we provide statistical evidence that, at the level of corporate governance, Europe is getting closer.

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Brokerage against transnational character in 2005 (Left) and 2010 (Right).Each point in the plane corresponds to a company;  and  coordinates define its normalized node betweenness (brokerage) and its ratio of transnational edges, respectively. For readability reasons, only company names in the upper -quantile of the betweenness distribution are shown.
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pone-0068581-g005: Brokerage against transnational character in 2005 (Left) and 2010 (Right).Each point in the plane corresponds to a company; and coordinates define its normalized node betweenness (brokerage) and its ratio of transnational edges, respectively. For readability reasons, only company names in the upper -quantile of the betweenness distribution are shown.

Mentions: All in all, the core of the network is not dominated by one country but transnationally composed. This brings us to the issue how transnationally oriented the central firms themselves are. For this, we computed the ratio of transnational edges per firm as an indicator of the transnational character. Figure 5 plots this ratio against the betweenness centrality. It shows that those firms that broker distant parts of the network are indeed part of the transnational network. However, the relation has an inverted u-shape where the firms which are most transnational have relatively low levels of brokerage. The top brokers are not the most transnational firms. Rather, the top brokers combine a strong national position with a strong European position; they are linchpins between the national and the European. In that sense, organizing pillars of the European network still build on national business communities. At the same time there is a set of firms that are highly transnational, but do not occupy key broker positions in the network. Again, this is probably due to smaller board size, which limits brokerage opportunities and increases the probability for high ratios.


The community structure of the European network of interlocking directorates 2005-2010.

Heemskerk EM, Daolio F, Tomassini M - PLoS ONE (2013)

Brokerage against transnational character in 2005 (Left) and 2010 (Right).Each point in the plane corresponds to a company;  and  coordinates define its normalized node betweenness (brokerage) and its ratio of transnational edges, respectively. For readability reasons, only company names in the upper -quantile of the betweenness distribution are shown.
© Copyright Policy
Related In: Results  -  Collection

Show All Figures
getmorefigures.php?uid=PMC3716815&req=5

pone-0068581-g005: Brokerage against transnational character in 2005 (Left) and 2010 (Right).Each point in the plane corresponds to a company; and coordinates define its normalized node betweenness (brokerage) and its ratio of transnational edges, respectively. For readability reasons, only company names in the upper -quantile of the betweenness distribution are shown.
Mentions: All in all, the core of the network is not dominated by one country but transnationally composed. This brings us to the issue how transnationally oriented the central firms themselves are. For this, we computed the ratio of transnational edges per firm as an indicator of the transnational character. Figure 5 plots this ratio against the betweenness centrality. It shows that those firms that broker distant parts of the network are indeed part of the transnational network. However, the relation has an inverted u-shape where the firms which are most transnational have relatively low levels of brokerage. The top brokers are not the most transnational firms. Rather, the top brokers combine a strong national position with a strong European position; they are linchpins between the national and the European. In that sense, organizing pillars of the European network still build on national business communities. At the same time there is a set of firms that are highly transnational, but do not occupy key broker positions in the network. Again, this is probably due to smaller board size, which limits brokerage opportunities and increases the probability for high ratios.

Bottom Line: Powerful community detection heuristics indicate that geography still plays an important role: there exist clear communities and they have a distinct national character.Nonetheless, from 2005 to 2010 we observe a densification of the boards interlocks network and a larger transnational orientation in its communities.Together with central actors and assortativity analyses, we provide statistical evidence that, at the level of corporate governance, Europe is getting closer.

View Article: PubMed Central - PubMed

Affiliation: Department of Political Science, University of Amsterdam, Amsterdam, The Netherlands.

ABSTRACT
The boards of directors at large European companies overlap with each other to a sizable extent both within and across national borders. This could have important economic, political and management consequences. In this work we study in detail the topological structure of the networks that arise from this phenomenon. Using a comprehensive information database, we reconstruct the implicit networks of shared directorates among the top 300 European firms in 2005 and 2010, and suggest a number of novel ways to explore the trans-nationality of such business elite networks. Powerful community detection heuristics indicate that geography still plays an important role: there exist clear communities and they have a distinct national character. Nonetheless, from 2005 to 2010 we observe a densification of the boards interlocks network and a larger transnational orientation in its communities. Together with central actors and assortativity analyses, we provide statistical evidence that, at the level of corporate governance, Europe is getting closer.

Show MeSH
Related in: MedlinePlus