Forum du Parti Pirate

It should be noticed that, although scholars have long measured the concentration
of wealth and income [22], there is no prior quantitative estimation for control. Constructing a
Lorenz-like curve (Fig. 3) allows one to identify the fraction ? ? of top holders holding cumulatively
80% of the total network control. Thus, the smaller this fraction, the higher the concentration.
In principle, one could expect inequality of control to be comparable to inequality of income
across households and firms, since shares of most corporations are publicly accessible in stock
markets. In contrast, we find that only 737 top holders accumulate 80% of the control over the
value of all TNCs (see also the list of the top 50 holders in Tbl. S1). The corresponding level
?
?
of concentration is ?1 = 0.61%, to be compared with ?2 = 4.35% for operating revenue. Other
?
sensible comparisons include: income distribution in developed countries with ?3 ? 5%?10% [22]
? ? 30% in 2009). This means that network control is
and corporate revenue in Fortune1000 (?4
much more unequally distributed than wealth. In particular, the top ranked actors hold a control
ten times bigger than what could be expected based on their wealth. The results are robust with
respect to the models used to estimate control,

The fact that control is highly concentrated in the hands of few top holders does not determine
if and how they are interconnected. It is only by combining topology with control ranking that
we obtain a full characterization of the structure of control. A first question we are now able to
answer is where the top actors are located in the bow-tie. As the reader may by now suspect,
powerful actors tend to belong to the core. In fact, the location of a TNC in the network does
matter. For instance, a randomly chosen TNC in the core has about 50% chance of also being
among the top holders, compared to, e.g., 6% for the in-section (Tbl. S4). A second question
concerns what share of total control each component of the bow-tie holds. We find that, despite
its small size, the core holds collectively a large fraction of the total network control. In detail,
nearly 4/10 of the control over the economic value of TNCs in the world is held, via a complicated
web of ownership relations, by a group of 147 TNCs in the core, which has almost full control
over itself. The top holders within the core can thus be thought of as an economic “super-entity”
in the global network of corporations. A relevant additional fact at this point is that 3/4 of the
core are financial intermediaries. Fig. 2 D shows a small subset of well-known financial players
and their links, providing an idea of the level of entanglement of the entire core.
This remarkable finding raises at least two questions that are fundamental to the understanding
of the functioning of the global economy. Firstly, what are the implication for global financial stability? It is known that financial institutions establish financial contracts, such as lending or
credit derivatives, with several other institutions. This allows them to diversify risk, but, at the
same time, it also exposes them to contagion [15].