Corporate Ownership Network in the Aerospace and Defense Sector: The Ascendency of Passive Investment Funds

The global rise of passive investment funds is influencing corporate control structures, presenting notable challenges and opportunities, particularly in strategic sectors such as Aerospace and Defense (A&D). This paper aims to investigate who controls the corporate ownership network in the Aerospace and Defense (A&D) sector. Specifically, the objectives are to: 1) describe the corporate ownership network structure of the global A&D sector, identifying key actors and their positions; 2) analyze network properties (such as density, modularity, and centrality) to understand the distribution of influence; and 3) explore the relationship between ownership concentration, the type of dominant shareholders (e.g., passive funds, state, families), and potential implications for strategic orientation and long-term investment. Using network analysis on data from 225 publicly traded A&D companies worldwide, processed via Gephi. The findings confirm a highly concentrated, oligopolistic structure: 10 companies hold 61.9% of invested capital, with passive investment funds – BlackRock, Vanguard, State Street, and Capital Research – playing a central role, controlling over 45.7% of this capital. While further research is needed to establish direct causal links between the observed ownership concentration and its specific impacts on strategic decision-making or long-term outcomes, the concentration itself raises pertinent questions regarding alignment with sector development goals. The analysis highlights the importance of considering differences between countries and capitalism models in understanding ownership structure in the Aerospace and Defense sector.