eprintid: 3767
rev_number: 12
eprint_status: archive
userid: 6
dir: disk0/00/00/37/67
datestamp: 2017-09-04 09:15:17
lastmod: 2017-09-04 09:20:20
status_changed: 2017-09-04 09:15:17
type: monograph
metadata_visibility: show
creators_name: Rungi, Armando
creators_name: Morrison, Greg
creators_name: Pammolli, Fabio
creators_id: armando.rungi@imtlucca.it
creators_id: 
creators_id: 
title: Global ownership and corporate control networks
ispublished: pub
subjects: HB
subjects: HG
divisions: EIC
full_text_status: public
monograph_type: imt_eic_working_paper
keywords: Keywords: ownership, corporate control, multinational enterprises, financial networks, financial
institutions, offshore, economic entrenchment - 
JEL codes: G32; G34; F23; F36; C63; C71; L14
abstract: In this contribution, at first, we introduce a basic network framework to study pyramidal structures and wedges between ownership and control of companies. Then, we apply it to a dataset of
53.5 million of companies operating in 208 countries. Among others, we detect a strong concentra-
tion of corporate power, as less than 1% of parent companies collect more than 100 subsidiaries, but
they are responsible for more than 50% of global sales. Therefore, we show that the role of indirect
control, i.e., through middlemen subsidiaries, is relevant in 15% of domestic and 54% of foreign
subsidiaries. Among foreign companies, cases emerge of blurring nationality, when control paths
cross more than one national border, in the presence of multiple passports (19.1%), indirectly for-
eign (24.5%), and round-tripping subsidiaries (1.33%). Finally, we relate indirect control strategies
to country indicators of the institutional environment. We find that pyramidal structures arise less
likely in the presence of good financial and contractual institutions in the parent's country, as these
foster more transparent forms of corporate governance. Instead, parent companies choose indirect
control through countries of subsidiaries that have better financial institutions, possibly because it
is easier to coordinate decisions from remote. Finally, we find that offshore financial centers are
preferred jurisdictions for middlemen subsidiaries, probably due to a lower taxation and a lack of
financial disclosure.
date: 2017-09
date_type: published
number: 7
publisher: IMT School for Advanced Studies Lucca
pages: 37
institution: IMT School for Advanced Studies Lucca
issn: 2279-6894
citation:   Rungi, Armando and Morrison, Greg and Pammolli, Fabio  Global ownership and corporate control networks.  EIC working paper series  #7/2017    IMT School for Advanced Studies Lucca    ISSN 2279-6894.      
document_url: http://eprints.imtlucca.it/3767/1/EIC_WP_7_2017.pdf