Networks of global business elites:

Causes, properties, consequences

Diliara Valeeva

CORPNET, University of Amsterdam

SbS IAS seminar, 12 April 2019, University of Amsterdam

Elites today

• Tax evasion

• We are the 99%

• Global inequality

Title Text

The Guardian, 12 March 2019

https://www.theguardian.com/commentisfree/2019/mar/12/us-college-admissions-scandal-corruption-rigged

CNBC, 26 March 2019

https://www.cnbc.com/2019/03/26/nissan-reportedly-paid-to-send-carlos-ghosns-4-children-to-stanford.html

Corporate structure

Shareholders

Board of directors

Officers: CEO, CFO etc

Management

Takes, F.W. & Heemskerk, E.M. Soc. Netw. Anal. Min. (2016) 6: 97. https://doi.org/10.1007/s13278-016-0402-5

Network of global

business elites

1. Causes

2. Properties

3. Consequences

1. Causes

How do ties between corporations and executives form and evolve? 

with E. Heemskerk and F. Takes

2

FIRMS

A

B

2

INDIVIDUALS

X

Y

2

2

FIRMS

FIRMS

INDIVIDUALS

INDIVIDUALS

A

A

B

B

X

Y

Y

X

Argumentation

• Dual agency problem
• Firms and individuals
• Both have benefits and costs from a new tie
• If beneficial for both agents => ties will form

Data and Methods

• Denmark
• Board appointments during 1994-2014
• 4,504 individuals
• 1,459 firms
• Survival regression with network covariates

• Benefits for F: Reciprocal ties
• Costs for F: Redundant ties

A

B

Y

X

4-cycle

• Benefits for I: Elite cohesion

• Costs for I: Homogeneous ties

FIRMS

INDIVIDUALS

A

B

X

C

popular directors

• Benefits for F: Access to resources
• Costs for F: Busy directors

• Benefits for I: Status and salary

• Costs for I: Time and responsibility commitments

FIRMS

INDIVIDUALS

Conclusions

• Firms and individuals create interlock networks
• Dual agency of actors should not be ignored
• Leads to biases
• Duality is typical for social systems

2. Properties

Does global labor market for corporate executives exist?

with E. Heemskerk and F. Takes

Robyn Denholm, chair of the Tesla board since Nov 2018

Data and Methods

• Transnational careers
• 2000-2017
• 8,662 corporate executives
• 9,747 largest corporations
• 100 countries
• Clustering based on similarity of transitions

Similarity of sequences

• How similar are BE-NL-LU & BE-NL-FR?
• And BE-NL-LU & CN-TW-IN?
• Transition costs based on observed transitions
• Optimal matching algorithm
• Similar career trajectories are in one cluster

6 beaten paths

• European
• American
• Asian
• African
• Australian
• Caribbean

       1        2        3        4        5        6         7        8        9     10

       1        2        3        4        5        6         7        8        9     10

order of positions

      1        2        3        4        5        6         7        8        9     10

Conclusions

• The global labor market for executives exists
• But it's highly hierarchical, directed, complex
• There is a core and periphery
• And emergence of alternative centers

2. Properties

How does China transnationalize its business via elites and investments?

with N. De Graaff

Forbes 2000 list in 2018

Forbes 2000 list in 2018

Data and Methods

• Largest Chinese firms
• Interlock ties inside and abroad
• Ownership ties inside and abroad

Results

• 108 largest firms
• 25% of interlock ties are transnational
• 38% of ownership ties are transnational
• Main directions:

3. Consequences

Ideas

• Diffusion of corporate practices and diversity

• Accumulating positions and wage inequality

Final remarks

Diliara Valeeva

@diliara_valeeva

d.valeeva@uva.nl

This presentation online: slides.com/diliaravaleeva/ias2019

CORPNET

@uvaCORPNET

corpnet.uva.nl

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