Austria Inc. Forever? On the Stability of a Coordinated Corporate Network in Times of Privatization and Internationalization

Abstract

Abstract One of the features of organized Austrian capitalism is a tightly-knit corporate network (Austria Inc.) that facilitates control and coordination between companies. In the 1980s the subsidiaries of the Austrian industry-holding stock company (ÖIAG) and the largest banks were the central hubs of this network. Now, 30 years later, ÖIAG has privatized nearly all its companies and banks have not only merged and sold their equity interests, but also partly joined international business groups. Nevertheless, Austria Inc. has not eroded. By analyzing a network of personal connections between 1976 and 2000, I investigate in this article how the network has reconfigured to allow Austria Inc. to perpetuate. The analysis suggests three explanations: Despite extensive privatization of the economy, Austrian ownership continues to prevail within the network; the banking group Raiffeisen filled the gap that was opened by the withdrawal of the state from the economic sphere; members of the Austrian elite still use board meetings for social networking.