Financial Interest Groups and Interlocking Directorates

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Abstract
Many recent studies of interlocking directorates have paid special attention to the possible existence of interest groups or cliques within the corporate world (Allen, 1978; Dooley, 1969; Mariolis, 1977; Mintz and Schwartz, 1981a; Mizruchi, 1982b). The search for economic groupings of this type dates from the early part of the twentieth century when financial domination of industrial firms was thought to characterize American business. Bank control theory, in particular, posited the coalescence of individual companies into a number of competing groups, each organized around banking interests. Thus, Baran and Sweezy (1966: 17) define interest groups as “a number of corporations under common control, the locus of power being normally an investment or commercial bank or a great family fortune.”Early work in this area, therefore, attempted to identify separate groups of companies organized around either family or financial interests. Rochester (1936), for example, used information on stock ownership, banking dependence, service relationships, capital investments, and joint ventures to identify many autonomous cliques headed by founding families. Sweezy (1939) used a similar set of criteria to identify eight dominant financial interest groups. Perlo (1957) replicated these results 20 years later.