Abstract

The Penetration Coefficient of Participations

A model of a calculus of interlocking capital is developed and discussed on the basis of several simple examples of interlocking capital, and then applied to the investigation of participation relationship in the case of domestic public companies. The basic idea of the calculus of interlocking capital consists in imputing the characteristic value of a public limited company, or a group of such companies, for instance their share capital or sales figures, to the shareholders in proposition to their participations. Since the shareholders themselves may, in their turn, be dependent economic units (public companies) whose capital is held by third parties, in a highly interlocked economy calculation of the participation ratios must take account of numerous participation levels and possible reverse interlocking. The calculated share of an autonomous economic unit in a public company is the penetration coefficient of the participation of the autonomous economic unit in a given dependent economic unit with regard to the influence of such participation on the dependent public company. In the empirical study, public authorities, foreign countries, banks and private persons are treated as autonomous economic units. The domestic public companies (non-banks) are the dependent economic units. The penetration coefficients of the participations of autonomous economic units with respect to the influence of the participations on domestic public companies are calculated separately for the public companies of 16 sectors. Addition of the solutions gives the influence of articipations of autonomous economic units on all domestic public companies.