Who controls the automotive industry? Owners, shareholders and financial institutions

Type de publication:

Conference Paper

Source:

Gerpisa colloquium, GERPISA, São Paulo (2018)

Mots-clés:

Automotive industry; shareholders; financialization; economic sociology; organizational studies

Résumé:

Corporate control is a key topic to understand the dynamics of the contemporary economy and business strategies. Who controls the automotive industry? Recent studies suggest for that the corporate control of automotive firms is increasingly associated with banks and players from the financial system. It implies a significant increase of "financialization" and the role financial institutions in the dynamics and behavior of firms. This paper addresses the extent of influence of financial institutions in the corporate control of automotive companies. In order to understand this subject the paper aims to: 1) analyze the shareholder structure of the largest automobiles companies; 2) analyze the structure and the relations in the corporate ownership network; 3) Identify groups in the corporate ownership network and 4) analyze to what extent organizations depend on financial institutions. From the methodological point of view, the research is descriptive, exploratory, supported by qualitative, quantitative data and by social network analysis. The sample includes the 30th biggest (OICA classification) automakers and their shareholders. The corporate ownership network includes 30 automakers, 348 nodes and 654 connections (among companies, owners and financial institutions). Data on the shareholder structure were collected from multiple sources, including Orbis, 4Traders, Nasdaq, NYSE, Bloomberg and documents from companies. Data analysis is based on descriptive, exploratory and content analysis and as well supported by social network analysis (SNA). Specially, the paper focuses on some network properties that indicate the influence and power of some social actor and/or prominent groups like: weightcentrality, betweenness, eigencentrality and modularity. Some findings show how the automotive industry is strongly intermediated by investment funds, like Black Rock and Vanguard Group Dimensional and State Street. These investment funds exhibit highest scores of weightcentrality, betweenness, eigencentrality in the network. They have prominent structural position and intermediate shares like blockholders on a different stock exchange of the biggest automotive companies. Results also confirm the relatively dependence of some automobile companies from financial actors, mainly investment funds, banks, financial institutions and in some cases, the state. The paper addresses a central question in business and strategy about who controls the automotive sector. Therefore, the paper contributes to understanding how these players from financial systems can affect the corporate control of automotive companies and in some sense the transnational corporation.

Texte complet:

Corporate control is a key topic to understand the dynamics of the contemporary economy and business strategies. Who controls the automotive industry? Recent studies suggest for that the corporate control of automotive firms is increasingly associated with banks and players from the financial system. It implies a significant increase of "financialization" and the role financial institutions in the dynamics and behavior of firms. This paper addresses the extent of influence of financial institutions in the corporate control of automotive companies. In order to understand this subject the paper aims to: 1) analyze the shareholder structure of the largest automobiles companies; 2) analyze the structure and the relations in the corporate ownership network; 3) Identify groups in the corporate ownership network and 4) analyze to what extent organizations depend on financial institutions. From the methodological point of view, the research is descriptive, exploratory, supported by qualitative, quantitative data and by social network analysis. The sample includes the 30th biggest (OICA classification) automakers and their shareholders. The corporate ownership network includes 30 automakers, 348 nodes and 654 connections (among companies, owners and financial institutions). Data on the shareholder structure were collected from multiple sources, including Orbis, 4Traders, Nasdaq, NYSE, Bloomberg and documents from companies. Data analysis is based on descriptive, exploratory and content analysis and as well supported by social network analysis (SNA). Specially, the paper focuses on some network properties that indicate the influence and power of some social actor and/or prominent groups like: weightcentrality, betweenness, eigencentrality and modularity. Some findings show how the automotive industry is strongly intermediated by investment funds, like Black Rock and Vanguard Group Dimensional and State Street. These investment funds exhibit highest scores of weightcentrality, betweenness, eigencentrality in the network. They have prominent structural position and intermediate shares like blockholders on a different stock exchange of the biggest automotive companies. Results also confirm the relatively dependence of some automobile companies from financial actors, mainly investment funds, banks, financial institutions and in some cases, the state. The paper addresses a central question in business and strategy about who controls the automotive sector. Therefore, the paper contributes to understanding how these players from financial systems can affect the corporate control of automotive companies and in some sense the transnational corporation.

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Concéption Tommaso Pardi
Administration Géry Deffontaines

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