Understanding Climate Risk

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The Network of Global Control

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As the Occupy Wall Street movement transforms into Occupy X, and the protests against control of the world’s financial power spread, a new study has quantified the global network of ownership that concentrates that power. A paper published on October 26 in PloS ONE, The Network of Global Corporate Control by Stefania Vitali, James B. Glattfelder, Stefano Battiston from ETH Zurich, shows the 1%-40% figure of control is bang on the money.

The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic “super-entity” that raises new important issues both for researchers and policy makers.

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Written by Roger Jones

October 28, 2011 at 10:19 am