A double-edged sword: The conditional properties of elite network ties in the financial sector

Kevin L Young, Timothy Marple, James Heilman and Bruce A Desmarais
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Kevin L Young: Department of Economics, 14707University of Massachusetts Amherst, USA
Timothy Marple: Department of Political Science, 1438University of California Berkeley, USA
James Heilman: Department of Political Science, 14707University of Massachusetts Amherst, USA
Bruce A Desmarais: Department of Political Science, 52469Pennsylvania State University, USA

Environment and Planning A, 2023, vol. 55, issue 4, 997-1019

Abstract: Existing scholarship suggests a deep relationship between elite connections and policy making in the financial sector. But are elite ties between private industry and government a resource for private industry, or a liability? We find that they can be either, depending on the circumstances. We analyze the associations of elite ties within numerous policy-making processes in the financial sector by measuring the network closeness between firms and government regulators. We then relate these measures of network closeness to a range of actual regulatory outcomes, from highly politicized bank bailouts to meetings with regulators both in crisis environments and in more detailed technocratic policy-making. Our findings point to the importance of institutional context in differentiating the role that elite ties might play in different circumstances. Within financial regulatory policy-making, while social ties between firms and regulators matter, they matter in different ways within different institutional contexts.

Keywords: Networks; financialization; elites; financial regulation (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:55:y:2023:i:4:p:997-1019

DOI: 10.1177/0308518X221127704

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