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Type Journal Article
Scope Discipline-based scholarship
Title Backbone of complex networks of corporations: The flow of control
Organization Unit
Authors
  • Stefano Battiston
  • James Glattfelder
Item Subtype Original Work
Refereed Yes
Status Published in final form
Language
  • English
Journal Title Physical review. E
Publisher American Physical Society
Geographical Reach international
ISSN 2470-0045
Volume 80
Number 3
Page Range 036104
Date 2009
Abstract Text We present a methodology to extract the backbone of complex networks based on the weight and direction of links, as well as on nontopological properties of nodes. We show how the methodology can be applied in general to networks in which mass or energy is flowing along the links. In particular, the procedure enables us to address important questions in economics, namely, how control and wealth are structured and concentrated across national markets. We report on the first cross-country investigation of ownership networks, focusing on the stock markets of 48 countries around the world. On the one hand, our analysis confirms results expected on the basis of the literature on corporate control, namely, that in Anglo-Saxon countries control tends to be dispersed among numerous shareholders. On the other hand, it also reveals that in the same countries, control is found to be highly concentrated at the global level, namely, lying in the hands of very few important shareholders. Interestingly, the exact opposite is observed for European countries. These results have previously not been reported as they are not observable without the kind of network analysis developed here.
Free access at DOI
Official URL https://journals.aps.org/pre/abstract/10.1103/PhysRevE.80.036104
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Digital Object Identifier 10.1103/PhysRevE.80.036104
Other Identification Number merlin-id:9880
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