Social Networks and Entrepreneurship. Evidence from a Historical Episode of Industrialization

Javier Mejia

No 16380, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: This paper explores the relationship between social networks and entrepreneurship by constructing a dynamic social network from archival records. The network corresponds to the elite of a society in transition to modernity, characterized by difficult geographical conditions, market failures, and weak state capacity, as in late 19th- and early 20th-century Antioquia (Colombia).With these data, I estimate how the decision to found industrial firms related to the position of individuals in the social network. I find that individuals more important bridging the network (i.e. with higher betweenness centrality) were more involved in industrial entrepreneurship. However, I do not find individuals with a denser network to be more involved in this type of activity. The rationale of these results is that industrial entrepreneurship was a highly-complex activity that required a wide variety of complementary resources. Networks operated as substitutes of markets in the acquisition of these resources. Thus, individuals with network positions that favored the combination of a broad set of resources had a comparative advantage in industrial entrepreneurship. I run several tests to prove this rationale.

Keywords: Social networks; entrepreneurship; industrialization; 19th century; 20th century; ego-density; betweenness centrality. (search for similar items in EconPapers)
JEL-codes: L1 L2 N8 O1 (search for similar items in EconPapers)
Pages: 77
Date: 2018-06-19
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Social Networks and Entrepreneurship. Evidence from a Historical Episode of Industrialization (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:016380

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