Corporate networks form part of the institutional structure of markets and the business environment, enabling firms to coordinate their behaviour and regulate competition. Networks perform a number of economic functions: they reduce information asymmetries and uncertainty, and facilitate the redistribution of risk between banks, firms, and investors. Within these networks, firms collectively monitor one another and owners supervise their managers. This book analyses comparative data on interlocking directorates and capital networks between large corporations in the United States and five count ... More

Corporate networks form part of the institutional structure of markets and the business environment, enabling firms to coordinate their behaviour and regulate competition. Networks perform a number of economic functions: they reduce information asymmetries and uncertainty, and facilitate the redistribution of risk between banks, firms, and investors. Within these networks, firms collectively monitor one another and owners supervise their managers. This book analyses comparative data on interlocking directorates and capital networks between large corporations in the United States and five countries in Europe: Germany, Great Britain, France, Switzerland, and the Netherlands. The structure of corporate networks is shaped by the traditions, culture, and institutions of a country. Corporate networks may be considered as a configuration of firms that are connected to one another by managers (interlocks), or as a configuration of managers who meet each other on the board of directors (network of the economic elite). The resources on which the dominance of the economic elite is based are bureaucratic power, property rights, and social capital. Bureaucratic control over a company is linked with property rights in the context of specific network configurations that vary between countries and lead to differing forms of managerial control. In the transitional economies, the type of capitalism that is evolving somewhat resembles Western managerial capitalism, but with certain significant differences. Privatization created a relatively high concentration of ownership. There is no clear-cut separation of ownership and control, but rather a balance of power between managers and owners.