Who listens to the top? Integration of the largest corporations across sectoral networks

Abstract

Corporations use ties to other powerful organisations to influence the rules that structure their markets and the society in which they operate. The corporate interlocks created by board directors show how some corporations are more successful than others in integrating not only in the corporate world but also in other sectors. Neil Fligstein suggested that the best-organised and dominating corporations, or the incumbents, are the most successful in stabilising their markets. To explore the relationship between corporate networks and integration in other sectors in the setting of a small, open, but highly regulated economy, we analysed the intersection between the interlocking directorates among the top 1037 corporations in Denmark and seven other sectoral networks. We used a database containing 5079 affiliations and 56,536 positions, and show that the incumbents were better integrated across all sectors. The strong correlation between sectoral integration and turnover was deconstructed and an independent effect of prominence, or symbolic capital, was found. This suggests that when creating affiliations within and outside the corporate world it is not only the economic size that matters, but also the prestige of the firm.