The Community Structure of the Global Corporate Network

TL;DR

This paper analyzes the community structure of the global corporate ownership network, revealing that geographical location primarily shapes communities, with limited influence from industrial sectors, and assesses the financial sector's role in global connectivity.

Contribution

It provides the first quantitative analysis of community organization in the global corporate network and highlights the dominance of geographical factors over industrial sectors.

Findings

Communities are primarily geographically based.

Industrial sector has a marginal role in community formation.

The financial sector plays a key role in connecting global communities.

Abstract

We investigate the community structure of the global ownership network of transnational corporations. We find a pronounced organization in communities that cannot be explained by randomness. Despite the global character of this network, communities reflect first of all the geographical location of firms, while the industrial sector plays only a marginal role. We also analyze the network in which the nodes are the communities and the links are obtained by aggregating the links among firms belonging to pairs of communities. We analyze the network centrality of the top 50 communities and we provide the first quantitative assessment of the financial sector role in connecting the global economy.