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Financial Intermediaries and Capital Centralization in Global FDI: A Network Approach to Tracing Transnational Corporate Control

Alessio Abeltino, Tiziano Bacaloni, Andrea Bernardini, Francesco Giancaterini, Andrea Pannone

Abstract

Understanding how corporate control concentrates in modern ownership systems is crucial in an economy increasingly shaped by cross-border mergers and acquisitions. Rather than expanding productive capacity, these operations reorganize ownership and control over existing firms through complex transnational structures involving financial intermediaries, holding companies, and investment vehicles. As a result, corporate control may become highly concentrated even when formal ownership appears fragmented. This paper examines how foreign direct investments-related capital centralization reshapes firm-level governance by tracing how control converges on individual companies through multi-layered ownership networks. Focusing on two strategically relevant Italian firms, we show that control is rarely exercised solely by ultimate owners, but instead arises from the interaction of a small set of financially interconnected intermediaries operating along transnational ownership chains. The results show how small equity stakes translate into substantial governance power, highlighting the role of financial intermediation and raising implications for strategic autonomy and economic sovereignty in key sectors.

Financial Intermediaries and Capital Centralization in Global FDI: A Network Approach to Tracing Transnational Corporate Control

Abstract

Understanding how corporate control concentrates in modern ownership systems is crucial in an economy increasingly shaped by cross-border mergers and acquisitions. Rather than expanding productive capacity, these operations reorganize ownership and control over existing firms through complex transnational structures involving financial intermediaries, holding companies, and investment vehicles. As a result, corporate control may become highly concentrated even when formal ownership appears fragmented. This paper examines how foreign direct investments-related capital centralization reshapes firm-level governance by tracing how control converges on individual companies through multi-layered ownership networks. Focusing on two strategically relevant Italian firms, we show that control is rarely exercised solely by ultimate owners, but instead arises from the interaction of a small set of financially interconnected intermediaries operating along transnational ownership chains. The results show how small equity stakes translate into substantial governance power, highlighting the role of financial intermediation and raising implications for strategic autonomy and economic sovereignty in key sectors.

Paper Structure

This paper contains 18 sections, 2 figures, 1 table.

Table of Contents

  1. Introduction
  2. Capital Centralization: From Theoretical Premises to Empirical Mapping
  3. Network Power Measures for Tracing FDI Control
  4. Global Network Power: NPI and NPF
  5. Target-based Network Power Measures for FDI Analysis
  6. Application of T-NPI and T-NPF to the Italian Case
  7. Data Management and Imputation Framework
  8. Case Selection and Corporate Ownership Analysis
  9. UniCredit S.p.A.: Dispersed Ownership and Network-Based Control
  10. Enel S.p.A.: State Influence and the Role of Private Investors
  11. Discussion
  12. Concluding Remarks
  13. Acknowledgments
  14. Network Measures in Corporate Ownership
  15. Algorithms
  16. ...and 3 more sections

Figures (2)

  • Figure 1: (A) Enel S.p.A. 's network representation, with the Italian Republic of (Government) as the ultimate owner highlighted in red. This configuration represents the second scenario, without considering the free-float. Node size and color reflect the T-NPF transmitted through each node. In this scenario, the state exercises complete direct control. (B) Network representation for Scenario 4. Here, the ultimate owner is no longer a direct shareholder but becomes an indirect controlling entity through intermediary nodes.
  • Figure 2: Comparison of the top five shareholders ranked by T-NPI and T-NPF, highlighting how effective control pathways diverge through the different scenarios.