Toxic ties: corporate networks of market control in the European chemical industry, 1960–2000

This paper contributes to filling a gap in existing network scholarship by bringing into focus how companies utilize corporate networks of market control when confronted with uncertainties in their political-economic environment. Outlining a network theory of market control and taking the European chemical industry as its case, the paper utilizes original data to track board interlocks, cartel ties and mergers among the 24 largest chemical companies from 1960 to 2000. While a densely connected industry that was remarkably stable in its composition is observed, it is also concluded that the type(s) of market control measures companies engaged in evolved dynamically in response to political-economic conditions. The chemical companies reacted to the crisis of the 1970s by forming cartels; when cartels became less attractive due to regulatory developments, companies increasingly turned to the formation of transnational board interlocks to cope with intensified competition in the 1980s and 1990s; and when this form of market control proved insufficient, a number of the companies merged with one another. While the paper concludes that the sequencing of interlocks and cartels is mainly driven by exogenous pressures, it finds no evidence to support that board interlocks constitute sites of cartel formation.