Fragmented Networks and Entrepreneurship in Late Imperial Russia

67 Pages Posted: 19 Jun 2009 Last revised: 15 Apr 2011

See all articles by Henning Hillmann

Henning Hillmann

University of Mannheim

Brandy L. Aven

Stanford University; Carnegie Mellon University

Date Written: June 28, 2010


Emergent economies suffer from underdeveloped market infrastructures and insufficient public institutions to enforce contract commitments and property rights. Informal reputation-based arrangements may substitute for government enforcement but they require close-knit networks that enable monitoring. Economic development also requires access to capital, information and other resources, which is enabled by wide-reaching and diverse networks, and not by closure. How is entrepreneurship possible given these conflicting demands? We examine how partnership networks and reputation channel the mobilization of capital for new enterprises, using quantitative information on 4,172 corporate partnerships during the industrialization of late imperial Russia (1869-1913). We find that reputation is locally effective in small and homogeneous network components. By contrast, founders in the largest components that form the network core raise more capital from investors but benefit less from reputation and more from brokerage opportunities and ties that reach diverse communities.

Keywords: Networks, Reputation, Entrepreneurship, Organizations, Economic Institutions, Russia

JEL Classification: D23, L14, L22, M13, N43, N83

Suggested Citation

Hillmann, Henning and Aven, Brandy L. and Aven, Brandy L., Fragmented Networks and Entrepreneurship in Late Imperial Russia (June 28, 2010). Donald H Jones Center for Entrepreneurship Research Paper No. 11-02, Available at SSRN: or

Henning Hillmann (Contact Author)

University of Mannheim ( email )

A5, 6
Mannheim, Baden-Wuerttemberg D-68131

Brandy L. Aven

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

Stanford University ( email )

Stanford, CA 94305
United States

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