The Small-World of Italian Finance: Ownership Interconnections and Board Interlocks Amongst Italian Listed Companies

Abstract

In this paper we describe the complex network of Ownership Interconnections and Board Interlocks amongst Italian listed firms using methodologies coming from the theory of scale-free graphs. We show that, at a macro level, both Networks have "small-world" characteristics and we analyse how they evolved from 1999 to 2004 showing that while the importance of Ownership Interconnections decreases, Board Interlocks increase their relevance. We also identify, at a micro level, the degree of centrality of listed firms and, combining within- and between-analysis on our panel dataset, we single out its static and dynamic determinants. Central nodes in the Network are large financial institutions that have been listed on the Stock Exchange for a long period of time.

Keywords: Ownership Interconnections, Board Interlocks, Small-World

JEL Classification: G32