Social Networks and Entrepreneurship. Evidence from a Historical Episode of Industrialization
Javier Mejia ()
No 20180020, Working Papers from New York University Abu Dhabi, Department of Social Science
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 for 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.
New Economics Papers: this item is included in nep-bec, nep-cdm, nep-ent, nep-his, nep-net, nep-sbm, nep-soc and nep-ure
Date: 2018-09, Revised 2018-09
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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:nad:wpaper:20180020
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