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
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
1-mode
2-mode
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
2017
Telstra Corporation Limited (AU)
Career sequence:
NZ - IT - US - CH - AU - US
1996-2007
Sun Microsystems (NZ)
2007-2016
Juniper Networks Inc (IT)
2014
Tesla (US)
2016-2017
ABB Ltd (CH)
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
order of positions
individuals
1 2 3 4 5 6 7 8 9 10
order of positions
individuals
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
2003: 43 firms are Chinese
2018: 219 firms are Chinese
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:
=> HK, SG, KY, BM
=> US, GB, FR, DE, AU, IE, ES, NL
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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