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Bankers, Industrialists, and their Cliques: Elite Networks in Mexico and Brazil during Early Industrialization

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  • Musacchio, Aldo
  • Read, Ian

Abstract

The historiographies of Mexico and Brazil have implicitly stated that business networks were crucial for the initial industrialization of these two countries. Recently, differing visions on the importance of business networks have arisen. In the case of Mexico, the literature argues that entrepreneurs relied heavily on an informal institutional structure to obtain necessary resources and information. In contrast, the recent historiography of Brazil suggests that after 1890 the network of corporate relations became less important for entrepreneurs trying to obtain capital and concessions, once the institutions promoted financial markets and easy entry for new businesses. Did entrepreneurs in Brazil and Mexico organize their networks differently to deal with the different institutional settings? We examine whether in Mexico businessmen relied more on networks of interlocking boards of directors and other informal arrangements to do business than in Brazil. Our hypothesis is confirmed by three related results: (1) the total number of connections (i.e., the density of the network) was higher in Mexico than Brazil; (2) in Mexico, there was one dense core network, while in Brazil we find fairly dispersed clusters of corporate board interlocks; and most importantly, (3) politicians played a more important role in the Mexican network of corporate directors than their counterparts in Brazil. Interestingly, even though Brazil and Mexico relied on very different institutional structures, both countries had similar rates of growth between 1890 and 1913. However, the dense and exclusive Mexican network might have ended up increasing the social and political tensions that led to the Mexican Revolution (1910–1920).

Suggested Citation

  • Musacchio, Aldo & Read, Ian, 2007. "Bankers, Industrialists, and their Cliques: Elite Networks in Mexico and Brazil during Early Industrialization," Enterprise & Society, Cambridge University Press, vol. 8(4), pages 842-880, December.
  • Handle: RePEc:cup:entsoc:v:8:y:2007:i:04:p:842-880_00
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    Cited by:

    1. Javier Mejia, 2018. "Social Networks and Entrepreneurship. Evidence from a Historical Episode of Industrialization," Working Papers 20180020, New York University Abu Dhabi, Department of Social Science, revised Sep 2018.
    2. Santiago Kopoboru, 2013. "Using interlocks as a corporate strategy: a descriptive analysis of the Spanish case," Working Papers 13.01, Universidad Pablo de Olavide, Department of Business Organization and Marketing (former Department of Business Administration).
    3. Elias Carayannis & Stephen Clark & Dora Valvi, 2013. "Smartphone Affordance: Achieving Better Business Through Innovation," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 4(4), pages 444-472, December.
    4. Juan Antonio Rubio Mondéjar & Josean Garrués Irurzun, 2012. "Estructura corporativa e interlocking directorates en las mayores empresas españolas, 1917-1970," FEG Working Paper Series 01/12, Faculty of Economics and Business (University of Granada).
    5. Braun, Matías & Briones, Ignacio & Islas, Gonzalo, 2019. "Interlocking directorates, access to credit, and business performance in Chile during early industrialization," Journal of Business Research, Elsevier, vol. 105(C), pages 381-388.
    6. Elias Carayannis & Stephen Clark, 2011. "Do Smartphones Make for Smarter Business? The Smartphone CEO Study," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 2(2), pages 201-233, June.
    7. Esteves, Rui & Geisler Mesevage, Gabriel, 2019. "Social Networks in Economic History: Opportunities and Challenges," Explorations in Economic History, Elsevier, vol. 74(C).
    8. Claire E. F. Wright, 2022. "Above board? Interlocking directorates and corporate contagion in 1980s Australia," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 62(3), pages 290-312, November.

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