nep-cfn 2026-04-13 papers

on Corporate Finance

Issue of 2026–04–13
two papers chosen by
Zelia Serrasqueiro, Universidade da Beira Interior

Financial Intermediaries and Capital Centralization in Global FDI: A Network Approach to Tracing Transnational Corporate Control By Alessio Abeltino; Tiziano Bacaloni; Andrea Bernardini; Francesco Giancaterini; Andrea Pannone
The Screening Cost of Liquidity By Rui Sun

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

By:	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.
Date:	2026–04
URL:	https://d.repec.org/n?u=RePEc:arx:papers:2604.02875

The Screening Cost of Liquidity

By:	Rui Sun
Abstract:	A principal with cheap capital optimally forces her counterparty to borrow at above-market rates. The reason: the form of finance is a screening device. Advances provide liquidity but pool types; contingent transfers separate types, but, because they are not pledgeable, impose financing costs. The optimal contract preserves outside-finance exposure to maintain screening power. Two sufficient statistics pin down the optimal advance share. With complementary counterparties, a uniform subsidy that cheapens finance across every relationship can reduce the value of each. This explains the coexistence of early payment and contingent compensation in trade credit, venture capital, and internal capital markets.
Date:	2026–04
URL:	https://d.repec.org/n?u=RePEc:arx:papers:2604.06447

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