Javier García-Bernardo

The University of Amsterdam

ISA 2018

Nature, origins and political consequences of corporate networks in modern economic life?

corporate networks

Nodes:

• Companies

E.M. Heemskerk, F.W. Takes, J. Garcia-Bernardo and M.J. Huijzer ‘Where is the global corporate elite? A large-scale network study of local and nonlocal interlocking directorates‘, Sociologica 2016. 

corporate networks

Nodes:

• Companies

Vitali, Glattfelder and Battiston, The network of global corporate control, PloS one, 2011.

Links:

• Ownership

IDENTIFYING OFFSHORE FINANCIAL CENTERS

``Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network''

https://www.nature.com/articles/s41598-017-06322-9

Javier Garcia-Bernardo, Jan Fichtner, Frank Takes, Eelke Heemskerk

OFFSHORE FINANCIAL CENTERS

Offshore Financial Center (OFC): jurisdiction (country) that attracts financial activities from abroad through low taxation and lenient regulation.

• So, which countries are OFCs?
  • Definitions differ
  • Highly contested and politicized


• FDI/GDP ratio approach: substantially more Foreign Direct Investment than expected based on GDP


• Problematic because:
  • No exact investment flows, just dyadic relationships
  • OFC homogeneity assumption
    • Large countries hard to detect
    • No difference in roles

sinks and conduits

We look at which countries are used disproportionally in transnational ownership chains.

sink-OFCs

sink-OFFshore financial centers

siNKS ARE RELATIVELY STABLE OVER TIME

sinks are specialized geographically

conduit-OFCs

conduit-OFFshore financial centers

decline of the netherlands

• The Netherlands is the conduit between European companies and Luxembourg, in the middle of 23% country chains.


• Hong Kong (for China) and Luxembourg (for EU countries) serve as the main countries in the route to ``tax havens''.


• The United Kingdom is the conduit between European countries and former members of the British Empire, such as Hong Kong, Jersey, BVI and Bermuda.


• All conduit-OFCs are on our doorsteps, and are specialized geographically and sectorally.