Interlocking Directorship Networks: What is Relevant for the Evolution and Change of the Networks?

Abstract

In addition to the instruments based on pyramiding, voting pacts, cross shareholding, it is possible to underline the deviation of the principle of one share-one vote also using interlocking directorship networks where corporate links take place. In this paper it is argued the relevance of different ways of connections among corporations. Particularly, by making use of the graph theory, it is possible to take into account the strategic allocation in a group of allied firms. Through this approach the attention moves from the "number" of graph edges to the "importance" of each individual edge. Our claim is that the different "importance" of links is captured by the concentration index that measures the asymmetric distribution of corporate links. Such an information allows us to understand the progressive elimination of edges not only with regard to the implications on the distance among firms, but also by pointing out the real solidity of the network itself. Empirical application at the sample of all listed Italian companies between 1983 and 1998, in order to consider the evolution of the interlocking directorates, is also provided.