Financial Intermediaries and Capital Centralization in Global FDI: A Network Approach to Tracing Transnational Corporate Control

TL;DR

This paper investigates how transnational ownership networks and financial intermediaries concentrate corporate control, affecting governance and sovereignty in key sectors through a network analysis of FDI structures.

Contribution

It introduces a network approach to trace control in transnational ownership, revealing the role of intermediaries in capital centralization beyond formal ownership.

Findings

Control often arises from interconnected intermediaries rather than ultimate owners.

Small equity stakes can confer significant governance power.

Financial intermediation influences strategic autonomy and economic sovereignty.

Abstract

Understanding how corporate control concentrates in modern ownership systems is crucial in an economy increasingly shaped by cross-border mergers and acquisitions. Rather than expanding productive capacity, these operations reorganize ownership and control over existing firms through complex transnational structures involving financial intermediaries, holding companies, and investment vehicles. As a result, corporate control may become highly concentrated even when formal ownership appears fragmented. This paper examines how foreign direct investments-related capital centralization reshapes firm-level governance by tracing how control converges on individual companies through multi-layered ownership networks. Focusing on two strategically relevant Italian firms, we show that control is rarely exercised solely by ultimate owners, but instead arises from the interaction of a small set of financially interconnected intermediaries operating along transnational ownership chains. The results show how small equity stakes translate into substantial governance power, highlighting the role of financial intermediation and raising implications for strategic autonomy and economic sovereignty in key sectors.