Abstract

"The African Connection: Business and Power in a Period of Crises (1890-1940)"

Alvaro Silva, Nova School of Business and Economics (asilva@novasbe.pt)

Comparing corporate networks over time and across space has underscored the importance of national business systems in explaining structural patterns. Much less attention is focused on shorter-term dynamics in the corporate network.

This study seeks to break new ground, emphasizing the importance of recursive effects between the economy, business and politics in shaping the network dynamics and configuration. Over a century, the Portuguese corporate network had exhibited unusually low density and cohesion, much lower than other European countries for the same period. Against this background of low cohesion, how can the abnormally higher density of the early 20th century be explained?

This paper argues that the early twentieth century marked a unique period in structuring the Portuguese corporate network. Capital-intensive and politically dependent ventures created a broad coalition of interests structured around colonial companies, explaining why a federative principle dominated the network until the aftermath of the Great Depression.

This research uses information for the 125 largest Portuguese firms (1913-2010) built from primary data. Methodologically, it relies on network analysis and the reconstitution of the corporate structure. Finally, case studies on individual firms enable an in-depth analysis of business dynamics.

The paper conveys three contributions. The first brings to the foreground the effects of politics. Access to power in politically dependent ventures explains the network dynamics in the early twentieth century. The second contribution is methodological. Network analysis is deployed mainly as a heuristic tool for identifying puzzles, not as an analytical and meaning-loaded approach. The third contribution challenges the relationship between the density of the corporate network and national business systems. In the Portuguese case, the structurally low density is a consequence of economic backwardness and not a liberal market economy. Economic backwardness failed to spin off large and dense interlocking ties between firms.