Corporate Networks in Europe and the United States

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. Part One analyses comparative data on interlocking directorates and capital networks between the large corporations in six countries: Germany, Great Britain, France, the United States, Switzerland, and the Netherlands. The structure of corporate networks is shaped by the traditions, culture, and institutions of a country. The German corporate network, for instance, is highly centralized and includes almost all large corporations. The network in the United States, however, is decentralized and falls into a number of regional centres. Corporate networks may be considered as a configuration of firms that are connected to one another by managers (interlocks). Networks may also be considered 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. The top managers not only have a leading position within large corporations (bureaucratic power), they also represent the owner vis-à-vis the dependent firm on whose board they sit. Thus, bureaucratic control over a company is linked with property rights in the context of specific network configurations. These configurations vary between countries and lead to differing forms of managerial control in Germany, France, Britain, and the United States (Part Two of the book). Part Three concentrates on corporate networks and the structure of the market order in the transitional economies. The type of capitalism