Author Archives: Beatriz Rodriguez-Satizabal

Successful Entrepreneurship: A Matter of Location?

Entrepreneurship and Geography: An Evolutionary Perspective

By Erik Stam (Utrecht University)



This paper is an inquiry into the role of entrepreneurship in evolutionary economic geography. The focus is on how and why entrepreneurship is a distinctly spatially uneven process. We will start with a discussion on the role of entrepreneurship in the theory of economic evolution. Next, we will review the empirical literature on the geography of entrepreneurship. The paper concludes with a discussion of a future agenda for the study of entrepreneurship within evolutionary economic geography.

Review by Beatriz Rodríguez-Satizábal

This paper was distributed by NEP-HIS on 2012-07-29. For the business historians immerse in the research of the history of entrepreneurship, this paper by Erik Stam is a piece to read. The thoughtful review of the challenges that the relation between entrepreneurship and geography present to future research invites to open the discussion on the differences among countries based on the characteristics of the entrepreneur’s location rather than only on its cultural values and the institutional environment.

Stam challenges the growing view of entrepreneurship as a subject exclusively to be deal by management scholars. The paper brings the history back to the discussion and innovates in the use of evolutionary economic geography. As Jones and Wadwhani (2006) explain, the historical research on entrepreneurship has been particularly concerned with understanding the process of structural change and development within economies using Schumpeter’s approach to innovation.

Understanding the importance of the newcomers is beyond the focus of only one discipline and the use of economic geography will allow the researcher to deal with the question on how the location increases the chances to have entrepreneurs that introduce organizational and product innovations, without falling in the vicious cycle of explaining the increase of entrepreneurs exclusively by social variables such as religion, family values, or networks.

Moreover, by explaining that the entrepreneurs are hardly lone individuals who rely primarily on their extraordinary efforts and talents to overcome difficulties, Stam introduces the argument that for nascent entrepreneurs the focal choice is what kind of firm to start given their location, not so much choosing a location for a given firm. Therefore, it deals with the concern on the spatial distribution of entrepreneurship by searching the aspects of the interaction between the newcomers and the geographical distribution.

Stam claims that “in order to improve the insights in the spatial variations of entrepreneurship, we need to specify the type of entrepreneurship” (p. 10). Although, this is not new for those who study entrepreneurship, Stam’s proposition to include evolutionary geography gives space to a new research agenda. In the future the study of entrepreneurship should take into account the spatial concentration of the industry, the combined use of the entrepreneur and the firm as a unit of analysis, and the study of the exit of young firms to accomplish a deep analysis of the role of entrepreneurs in economic development.

Who’s Who in Spanish Corporate Governance?

Corporate Structure and Interlocking Directorates in Spanish Firms, 1917 – 1970

By Juan Antonio Rubio-Mondéjar  and Josean Garrués-Irurzun (Universidad de Granada)



This paper analyses some of the characteristics of Spanish capitalism between 1917 and 1970. For that purpose, we resort to the technique known as interlocking directorates and applies the methodology of social network analysis (SNA) to the board of directors of the 210 largest Spanish companies, in a benchmark dates (1917, 1930, 1948 and 1970). The results allow us to answer the questions of what has been the evolution of the Spanish business structure over the twentieth century and which sectors have been central to each of the moments analysed. At the same time, we identify the main groups of companies, and the links established among them, assessing the role of financial sector in the national economic structure. Based on the relationships between the members of the Board of Directors and social capital theory, the second objective identifies the circle of Spanish economic power, quantifies the degree of cohesion, and follow its evolution over time, confirming its continuity/ disappearance.

Review by Beatriz Rodríguez-Satizábal

This paper was distributed by NEP-HIS on 2012-05-22. Juan Antonio Rubio-Mondéjar and Josean Garrués-Irurzun offer a striking overview of the corporate structure in Spain during the twentieth century following up the work by Carreras and Tafunnel published in the early 1990s.  Using Social Network Analysis (SNA), the authors build the interlocking directorates of the 210 largest firms by assets (manufacture -200- and insurance -10-) based on information collected from the Anuarios Financieros de Bilbao and Anuario Financiero y de Sociedades Anónimas de España. The examination of the characteristics of the corporate governance seems to be now one of the issues that require a long-term view, this paper offers a general approach to the Spanish case.

The paper is divided in four sections. The first presents a review of the theoretical literature on corporate governance and economic entrenchment, including an overview of the literature on Spanish capitalism. The next two sections discuss the methodological approach and the results of building the interlocking directorates for 1917, 1930, 1948, and 1970. The final section is a short conclusion that opens a discussion regarding the proliferation of business groups and the role of the board members.

Firms network in 1917 (p. 49)

The paper strikes the reader in two ways. First, the discussion on the theoretical approach to interlocking directorates presents the importance of identifying the networks in order to prove the existence of a traditional business elite. This follows the sociological approach on the role of the elites, but do not include the recently findings on the rise of business groups as an organizational form to increase the entrenchment of the business people. It is shown that between 1917 and 1970 the members of the boards in the largest Spanish firms were related and share common professions and family names. Moreover, the names collected proved that there have been only small changes in the corporate governance among the twentieth century. The old families remained and only a few new names appeared after 1948. However, there is no discussion in regards to the family businesses, an issue that has been well studied in the last decade by the likes of Paloma Fernández, Jesús Valdaliso, Eugenio Torres, Nuria Puig and others.

Secondly, Rubio-Mondéjar and Garrués-Irurzun introduce a hypothesis on the importance of the interlocking directorates among the largest firms as an answer to the close relationship between the industry and the banks. The result is that the interlocking directorates affected more than 80 per cent of the firms studied, with the majority of the members linked in both the manufacture industry and the banks. This brings back the discussion on the role of banks in development started by Alexander Gerschenkron, but also poses into discussion the relationship between politicians and businessmen. There is a novelty approach to the former, the results show that there is no a unique network that linked all the firms together and the banks did not used a collusive strategy; could this mean that the firms used other ways to increase their market power and keep their ownership control; or, maybe, there are some regional differences. In the case of the later, the results are a surprise for those who use Spain as a comparative case with the Latin American countries: differently from what is expected, a politician usually became a member of the board, but not the other way around. This gives a new meaning to the professional lobbying and poses a question on the links between the political and business elites, traditionally assumed as the same.

This paper brings a discussion on the literature on Spanish corporate governance that could be useful for those studying other countries. The methodological approach combines the use of historical data with the social network analysis, bringing the question of who is who to the understanding of the economic development of a late development country. Moreover, it leaves questions open for future research such as the relation between the changes in the economic and social environment with the interlocking directorates.

The History of Media Entrepreneurs

Who Are the Entrepreneurs: The Elite or Everyman?

By Heather Haveman (University of California, Berkeley), Jacob Habinek (University of California, Berkeley), and Leo A. Goodman (University of California, Berkeley)



We trace the social positions of the men and women who found new enterprises from the earliest years of one industry’s history to a time when the industry was well established. Sociological theory suggests two opposing hypotheses. First, pioneering entrepreneurs are socially prominent individuals from fields adjacent to the new industry and later entrepreneurs are from an increasingly broad swath of society. Second, the earliest entrepreneurs come from the social periphery while later entrepreneurs include more industry insiders and members of the social elite. To test these hypotheses, we study the magazine industry in America over the first 120 years of its history, from 1741 to 1860. We find that magazine publishing was originally restricted to industry insiders, elite professionals, and the highly educated, but by the time the industry became well established, most founders came from outside publishing and more were of middling stature – mostly small-town doctors and clergy without college degrees. We also find that magazines founded by industry insiders remained concentrated in the three biggest cities, while magazines founded by outsiders became geographically dispersed. Finally, we find that entrepreneurship evolved from the pursuit of a lone individual to a more organizationally-sponsored activity; this reflects the modernization of America during this time period. Our analysis demonstrates the importance of grounding studies of entrepreneurship in historical context. Our analysis of this “old” new media industry also offers hints about how the “new” new media industries are likely to evolve.

Review by Beatriz Rodriguez-Satizabal

The paper was distributed by NEP-HIS on March 28, 2012. The study of entrepreneurship is nowadays a hot

Heather Haveman

topic among historians, sociologists, and economists. The title of this working paper by Heather Haverman, Jacob Habinek, and Leo A. Goodman should capture the attention of all these academics and particularly historian interested in the history of entrepreneurship.

Jacob Habinek

The resurgence of the entrepreneur as an important figure in the economic theory, after have been neglected for many years (when compared to say, the strategies of multinationals). This resurgence has been marked in the last three decades by an increase number of biographies of successful entrepreneurs, the creation of research projects such as the Global Entrepreneurship Monitor, and the recent proliferation of public policies towards financing entrepreneurs in order to promote economic development.

Leo A. Goodman

Dealing with the issue of the social background of the entrepreneurs has been an essential part of the discussion of who are they, what are their characteristics, and why they exist. In general, researchers have found that the background varies across countries, cultures, and industries, and, more importantly, being a successful entrepreneur offers a chance to increase social mobility.

Guided by the perception that recent research has not incorporated a historical perspective that assumes changes across time and space in the industry where the entrepreneurs are performing its activities, Haverman et al. goal is to answer to the question: how the social positions of entrepreneurs vary across the path of industry development? Basically, their interest is to know if there are any differences between the entrepreneurs enter early in the industry’s history and those appearing in its development later on. This represents the challenge of the paper; it is calling the attention over the relationship between the entrepreneur and the industry. In other words, the entrepreneur cannot be study without a full understanding of its industry, its dynamics and the causes that result in changes within it. Is returning to the basic approaches to entrepreneurship lead by J. Schumpeter, W. Sombart, and more recently, Mark Casson. It also offers a way to deal with this approach using quantitative analysis.

Taking as case study the American magazine industry between 1741, when the first magazines appeared, and 1860, the eve of the Civil War, the authors centred their attention on the social positions of the entrepreneurs (occupation, education, location) in two periods of the industry: 1741 to 1800 during which time American magazines were few in number, poorly understood, and small, and 1841 to 1860, when American magazines were common, generally accepted means of communication, and many reached mass audiences. The mass media industry is becoming a subject of interest both as a unit of analysis and a source (e.g. Richard John’s paper in the last number of Enterprise & Society),but there is still a lack of a specific definition of what is an entrepreneur in the media mass industry, which are the variables that define it; moreover, when today there is a boom of media innovators and journalists. Understanding that the scope of the study was limited by the information available is important to mention that the use of social positions as a starting point is not a revolutionary idea and the authors could enrich the paper by including other variables related with the social and political networks, the economic background, and, why not, the innovations they brought to the industry.

One of the first publications by Andrew Bradford dating to 1741.

Using a wide variety of sources that includes the magazines, dictionaries of biography, and books on the history of publishing, Haverman et al. gathered a sample of the founders of 148 magazines for the first period and 150 for the last one. To assess their hypothesis that in the early years of an industry the entrepreneurs are part of the elite and it changes when the industry is mature, the authors follow three methods: bivariate analysis, multivariate analysis, and log-linear analysis, the last being the one where the authors claim the novelty for future entrepreneurship studies that are willing to involve a historical perspective. As a result, Haverman et al. conclude that the entrepreneurs during the early years of the magazine industry where professionals (mostly lawyers), highly educated, members of the publishing trades, and mainly located in the cities known for being the first publishing centres (New York, Boston, Philadelphia). After the early years, this pattern changed. The audience for magazines increase, the production and distribution technologies were cheaper, and the copyright law developed making space for a new wave of entrepreneurs from different social backgrounds, ages, and located across the country.

This ambitious working paper brings a discussion on how to relate the history of entrepreneurship (the people) with the history of the industry (firms and aggregate supply). Relating the sociological characteristics of the entrepreneurs with the maturity of the industry seems to be a good idea, but the risk is that in the way of catching the individual characteristics of the links with the industry can be omitted.

On the Explanations of How Latin America Fell Behind

Between Conquest and Independence: Real Wages and Demographic Change in Spanish America, 1530-1820

By Leticia Arroyo Abad (, Elwyn A.R. Davies, Jan Luiten van Zanden (



On the basis of a newly constructed dataset, this paper presents long-term series of the price levels, nominal wages, and real wages in Spanish Latin America – more specifically in Mexico, Peru, Bolivia, Colombia, Chile, and Argentina – between ca. 1530 and ca. 1820. It synthesizes the work of scholars who have collected and published data on individual cities and periods, and presents comparable indices of real wages and prices in the colonial period that give a reasonable guide to trends in the long run. We show that wages and prices were on average much higher than in Western Europe or in Asia, a reflection of the low value of silver that must have had consequences for competitiveness of the Latin American economies. Labour scarcity was the second salient feature of Spanish Latin America and resulted in real wages much above subsistence and in some cases (Mexico, Bolivia, and Argentina) comparable to levels in Northwestern Europe. For Mexico, this was caused by the dramatic decline of the population after the Conquest. For Bolivia, the driving force was the boom in silver mining in Potosi that created a huge demand for labour. In the case of Argentina, low population density was a pre-colonial feature. Perhaps due to a different pattern of depopulation, the real wages of other regions (Peru, Colombia, Chile) were much lower, and only increased above subsistence during the first half of the 18th century. These results are consistent with independent evidence on biological standards of living and with estimates of GDP per capita at the beginning of the 19th century.

Review by: Beatriz Rodríguez-Satizábal

This paper was distributed in the NEP-HIS report issued on January 25th, 2012. In it the authors contribute to the debate on how Latin America fell behind the developed world during the early twentieth century while presenting an alternative explanation to the widely spread argument that underperformance had its roots in the Colonial period (see for example Engerman and Sokoloff, 2005; Prados de la Escosura, 2009; Coathsworth, 2005; Acemoglu, Johnson, and Robinson, 2001; among others).

To support their idea Arroyo, Davies, and van Zanden offer a new integrated long-term data series of price levels, nominal wages, and real wages in Mexico, Peru, Bolivia, Chile, Colombia, and Argentina (silver and gold mining centres) for the years between the Conquest (16th century) and the Independence (19th century). The data emerges mainly from other studies which were published during the last 50 years.

The chief empirical aim of Arroy and colleagues is measuring real wages as welfare ratios while following the methodology developed by Allen (2001) and then compare their estimates with those for Western European countries. In order to estimate the welfare ratio, they first constructed a series based on the annual wage income of an unskilled worker (mostly in mining and construction) and then an estimate the value of a basket of goods for a family of four, focusing on the cheapest staples (maize, beans, and meat for Mexico, Peru, Bolivia, and Colombia; wheat and meat for Argentina and Chile).

As a result, their basic hypothesis that the Latin American region had similar conditions with the European developed countries is revealed. More specifically, they argue that although living in colonial Latin America was costly –prices were high throughout the region when compared with Europe-, nominal wages were also high and the real wages reacted to the decline in population following the same patterns as Europe after the Black Death. Therefore, they conclude that the “Latin American price experience was far from unique in historical perspective. The long-term evolution of prices was similar to the one experienced in Western Europe (…) The wage data suggests that in long-term wages responded to market conditions rather than the coercive colonial institutions” (pp. 29 – 30). The reason for this, they argue, is related to the nature of the Latin American economy: an economy where the markets affected prices and wages rather than a feudal one dominated by non-market institutions.

This paper offers a new approach to one of the fundamental questions regarding Latin American development: why did Latin-Americans countries fell behind despite the fact that during the 18th and 19th century wages were more attractive for Europeans in South America than in North America? Was the Spaniard rule the cause? Arroyo and colleagues point towards the effect of variables such as the labour demand, the monetary incentives as part of the labour relationship, and the market conditions that were not only marked by the institutions created for the exploitation of labour in an economy based on the extraction of natural resources. Moreover, the efforts by the authors to produce a new data series suggests that the assumption made by Angus Maddison in “The world economy: a millennial perspective” regarding estimates of the GDP per capita could be way off the mark because, according to Arroyo and her colleagues, the effect of the changing indigenous population did not have a great effect on real wages.

This paper encourages a new analysis of the long-term development of Latin America. Although there is an emphasis on regional analysis, the paper does show differences in estimates between countries within the region. This is again a departure from “classic” or “canonical” works on Latin America, all of which have a tendency to assume heterogeneous developments across geographies.

The analysis by Arroyo and colleagues shows that although countries were dominated by the same metropolitan power (namely the Spanish crown), individual territories observed different paths in wages and population growth. This could result in a new orientation for future development and inequality debates. More so as significant gaps are emerging between two groups of countries in the region namely, the largest economies classified in the literature as LA6 (Brazil, Chile, Argentina, Mexico, Colombia, and Peru) and the rest of the countries (labelled as LA13). This substantial gap between them has been suggested by the work of Astorga, Berges and Fitzgerald (2005).

Furthermore, in terms of the future economic development, those Latin American countries that are catalogued within the BRICs (Brasil, Russia, India, and China) or the CIVETs (Colombia, Indonesia, Vietnam, Egypt, and Turkey) will need new explanations over the reasons why they are becoming part of the developed world in the twenty first century.