Close Communication and 2-Clubs in Corporate Networks: Europe 2010

TL;DR

This paper analyzes the structure of European corporate networks in 2010, focusing on close communication sub-networks called 2-clubs, to understand how boards of top companies are interconnected during a period of economic upheaval.

Contribution

It introduces a framework for analyzing close communication sub-networks in corporate interlock networks and applies it to the 2010 European corporate network data.

Findings

Identification of various types of 2-clubs within the network

Insights into the structure of corporate board interlocks during 2010

Enhanced understanding of close communication clusters in corporate networks

Abstract

Corporate networks, as induced by interlocking directorates between corporations, provide structures of personal communication at the level of their boards. This paper studies such networks from a perspective of close communication in sub-networks, where each pair of nodes (boards of a corporation) are either neighbours, or have a common neighbour. These correspond to subgraphs of diameter at most 2, designated by us earlier as 2-clubs, with three types (coteries, social circles and hamlets) as degrees of close communication in social networks, within the concept of boroughs of a network. Boroughs are maximal areas and containers of close communication between nodes of a network. This framework is applied in this paper to an analysis of corporate board interlocks between the top 300 European corporations 2010, as studied by Heemkerk (2013), with data provided by him for that purpose. The paper gives results for several perspectives of close communication in the European corporate network of 2010, a year close to the global crash of 2008, as a further elaboration of those given in Heemskerk (2013).