Relationship-based Business in Changing European Financial Scenarios: The Case of Parent Schaken et Compagnie (1835-1866)

In a time when formal (impersonal) markets for credit were embryonic, the role of social relationships in raising funds for new ventures was crucial. “Investment tended to be cumulative social process” where trust and reputation played a role. Strong kinship and business ties linking partnership members were therefore critical in facilitating the flow of capital into new ventures. The way the diversified and broad-ranging businesses (railways, mines, public utilities) undertaken by the Paris-based partnership Parent Schaken et C.ie (P&S) were funded illustrates an important point about this topic. By making use of the basic tools of the Social Network Analysis, the paper shows how the P&S network of interpersonal relationships evolved and just how it mattered in facing the changing European financial scenarios when long-term investment developed and impersonal money markets took shape.