Social Capital Versus Commercial Profits: The Impact of Networks on Decision-Making in Early Modern Banks

Nadia Matringe ()
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Nadia Matringe: London School of Economics

A chapter in Decision Taking, Confidence and Risk Management in Banks from Early Modernity to the 20th Century, 2017, pp 211-234 from Palgrave Macmillan

Abstract: Abstract Historians and economists have generally emphasised the role of economic, political and institutional contexts (such as monetary trends, wars, forms of regulation, etc.) in the shaping of early modern business strategies. It appears, however, that an important social factor is often neglected in such analyses: networks. Based on the records of a major sixteenth-century merchant-banking firm (the Salviati), this paper highlights the central role of networks in decision-making processes, by showing how networks impacted on the notion of profit driving the economic action of early modern banks. This is manifest at three levels, namely (1) shaping of the accounting system; (2) fixing of interest rates in deposit and exchange transactions; and (3) regulation of opportunistic behaviour.

Keywords: Social Capital; Balance Sheet; Opportunistic Behaviour; Loss Account; Commercial Partner (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psitcp:978-3-319-42076-9_10

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DOI: 10.1007/978-3-319-42076-9_10

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