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2006.134: Ownership and Control: A Small-World Analysis

2006.134: M. J. Conyon and M. R. Muldoon (2007) Ownership and Control: A Small-World Analysis.

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Abstract

In this paper we investigate the ownership and control of British firms using recent techniques from computational graph theory. Specifically, we analyze the `small-world' of ownership and control. A small-world is a network whose actors are linked by a short chain of acquaintances (short path-lengths), but at the same time have a strongly overlapping circle of friends (high clustering). We simulate a set of corporate worlds using an ensemble of random-graphs introduced by Chung and Lu (2002a,b). We find network structure is more clustered (`clubby') than would be predicted by the random-graph model. Path-lengths, though, are generally not shorter than expected. In addition, we investigate the role of financial institutions: potentially important conduits creating connectivity in corporate networks. We find such institutions give rise to systematically different network topologies.

Item Type:MIMS Preprint
Additional Information:

To appear in Advances in Strategic Management

Uncontrolled Keywords:Corporate directorships, small worlds, random graphs
Subjects:PACS 2003 > 89 Other areas of applied and interdisciplinary physics
MIMS number:2006.134
Deposited By:Dr Mark Muldoon
Deposited On:30 November 2007

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