In 2011 the ETH-Zurich (Eidgenössische Technische Hochschule/Swiss Federal Institute of Technology) published a study on the balance of power in global capitalism.
The study by Stefania Vitali, James B. Glattfelder and Stefano Battiston has the name "The Network of Global Corporate Control".
It provides an example of the importance of government regulations.
And since globalization is viewed critically in the US with President Donald Trump and Euro- and EU-critical parties in Europe the study should be viewed again.
The three systems theorists of ETH-Zurich have analyzed 43,060 transnational companies. For this purpose the database Orbis with 37 million companies and investors was examined. From this database a model was created that provides information about the ownership relations. And this model results in a network of mutual shareholdings or who owns which shares and profits. [1,p.3]
The definition of transnational companies comes from the OECD (Organization for Economic Cooperation and Development). These are companies those who operate in more than one state, exert a significant influence, are interconnected and occasionally coordinate their activities with each other. According to the definition of the OECD transnational corporations can include both private and state owners. [1,p.3]
The study shows that there are interconnected groups of increasingly interconnected and transnational corporations. The result is that there is a group of 1,318 transnational corporations that control most of the economy thanks to shareholding. The group of 1,318 transnational corporations includes a core of 286 transnational corporations that are even more interconnected and control large parts of the economy. [1,p.15]
It is striking that transnational companies from the financial sector are over-represented. The top performers include Barclays, JP Morgan Chase, UBS, the Deutsche Bank and Credit Suisse. a href="https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0025995">[1,p.15] In addition transnational companies from the financial sector are only 46,632 and outnumbered by other industries. Nevertheless they have the biggest influence. [1,p.13]
Economic structures in which ownership and influence go beyond national borders can have serious economic and political consequences. Mutual ownership can cause economic crises to spread increasingly into other countries. In addition through the mutual property relations political pressure can be exerted on other states by appropriate de- or investments. Another possibility would be for transnational companies to exert pressure with informal talks beforehand. [1,p.15]
It should be noted however that under certain circumstances investing abroad is helpful or necessary. Ressource exporting countries have the choice to use the revenue directly or by investing abroad. The more revenue is used directly the more the exchange rate of your own currency increases. As a result imports will become cheaper, displace local production and make exports more expensive. As an alternative to this phenomenon known as the Dutch disease ressource exporting countries can have their own sovereign wealth funds.
The study "The Network of Global Corporate Control" thus shows the significance of government regulations. It should also be noted that since the study was published, no major countermeasures have been taken to stem the influence of transnational corporations. And even after 8 years the findings should not be neglected.
[1] The Network of Global Corporate Control 2011-10-26
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0025995
The three systems theorists of ETH-Zurich have analyzed 43,060 transnational companies. For this purpose the database Orbis with 37 million companies and investors was examined. From this database a model was created that provides information about the ownership relations. And this model results in a network of mutual shareholdings or who owns which shares and profits. [1,p.3]
The definition of transnational companies comes from the OECD (Organization for Economic Cooperation and Development). These are companies those who operate in more than one state, exert a significant influence, are interconnected and occasionally coordinate their activities with each other. According to the definition of the OECD transnational corporations can include both private and state owners. [1,p.3]
The study shows that there are interconnected groups of increasingly interconnected and transnational corporations. The result is that there is a group of 1,318 transnational corporations that control most of the economy thanks to shareholding. The group of 1,318 transnational corporations includes a core of 286 transnational corporations that are even more interconnected and control large parts of the economy. [1,p.15]
It is striking that transnational companies from the financial sector are over-represented. The top performers include Barclays, JP Morgan Chase, UBS, the Deutsche Bank and Credit Suisse. a href="https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0025995">[1,p.15] In addition transnational companies from the financial sector are only 46,632 and outnumbered by other industries. Nevertheless they have the biggest influence. [1,p.13]
Economic structures in which ownership and influence go beyond national borders can have serious economic and political consequences. Mutual ownership can cause economic crises to spread increasingly into other countries. In addition through the mutual property relations political pressure can be exerted on other states by appropriate de- or investments. Another possibility would be for transnational companies to exert pressure with informal talks beforehand. [1,p.15]
It should be noted however that under certain circumstances investing abroad is helpful or necessary. Ressource exporting countries have the choice to use the revenue directly or by investing abroad. The more revenue is used directly the more the exchange rate of your own currency increases. As a result imports will become cheaper, displace local production and make exports more expensive. As an alternative to this phenomenon known as the Dutch disease ressource exporting countries can have their own sovereign wealth funds.
The study "The Network of Global Corporate Control" thus shows the significance of government regulations. It should also be noted that since the study was published, no major countermeasures have been taken to stem the influence of transnational corporations. And even after 8 years the findings should not be neglected.
[1] The Network of Global Corporate Control 2011-10-26
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0025995
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