The flow of corporate control in the global ownership network

We propose a model and algorithm to measure the amount of influence a shareholder has over the flow of corporate control held by the ultimate owners. Existing models of corporate ownership and control either focus on the ultimate owners’ influence or inadequately evaluate the influence possessed by intermediate shareholders in a ownership network. As it extends Network Power Index (NPI) that describes the the power of corporate control possessed by the ultimate owners, our new model, Network Power Flow (NPF), delineates the distribution of ownership influence among shareholders across the network and identifies the channels through which the ultimate owners’ corporate control travel through the global shareholding network. Our analysis of NPI and NPF values for 7 million ultimate owners and 16 million shareholders reveals a new landscape of ownership and control in the global shareholding network that remained opaque before

Efficient secrecy: public versus private threats in crisis diplomacy.

Abstract This paper explores when and why private communication works in crisis diplomacy. Conventional audience-cost models suggest that state leaders must go public to reveal information in interstate crises because leaders cannot enhance their credibility by tying their hands if domestic audiences cannot observe their private signals. I present a crisis bargaining game where both the sender and the receiver of signals have a domestic audience. The equilibrium analysis demonstrates that a private threat, albeit of limited credibility, can be equally compelling as a fully credible public threat. Secrecy works in crisis diplomacy despite its informational inefficacy because secrecy insulates leaders from domestic political consequences when they capitulate to a challenge to avoid risking unwarranted war. The logic of efficient secrecy may shed light on the unaccounted history of private diplomacy in international crises. The Alaska Boundary Dispute illustrates this logic.