The analysis was conducted into the interconnections between 43,000 transnational corporations and it reveals that certain types of companies are more powerful than others (primarily banks) and that a very small number hold a disproportionate amount of global power.
The research was undertaken at the Swiss Federal Institute of Technology in Zurich, where the researchers had the aim of empirically identifying the extent to which a network of power actually exists (going beyond the assumptions in some political theories).
To unpick the network, the researchers drew on mathematical models that were originally developed to study natural systems. These formulas were used to assess comprehensive corporate data, which included both direct and indirect ownership patterns, and then to construct the map of interconnected ownership.
Using a database called Orbis 2007, which contains 37 million companies and investors globally, researchers pulled out 43,060 transnational corporations and proceeded to examine the share ownerships linking them.
In terms of the major power centers, there is a core of 1318 companies with interlocking ownerships who are essentially involved with or able to influence the actions of the other 42,000 or so transnationals. The transnationals in turn can influence the behaviors of other companies and even nation states.
In terms of economic weight, the 1318 companies represent 20 percent of global operating revenues, and collectively through share ownership they own the majority of the world’s leading firms, representing a further 60 percent of global revenues.
Within the 1318 lies a so-termed “super-entity” of 147 tightly knit companies. This one percent of the companies appear to be able to exert control over 40 percent of the entire international business network.
The top ten superconnected companies are:
1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
The researchers’ secondary aim was to identify ways of making global capitalism more stable. Discussing the findings with New Scientist magazine, researcher James Glattfelder said: “Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market. Our analysis is reality-based.”
The study is published in PLoS One and the research paper is titled “The network of global corporate control,” and it can be viewed online in its entirety.