BANKS IN NATIONAL CORPORATE NETWORKS: HOW "WESTERN" THEORIES WORK IN RUSSIA?

Abstract

A number of theories have been employed to explain positions of banks in the corporate networks of developed economies. I investigate whether these theories are consistent with the empirical findings about banks in the Russian corporate network. Russian banks receive many directional ties created by executives of industrial corporations on boards of banks. A similar network position is interpreted as an indicator of power of banks in the United States, but this interpretation is not applicable to Russia, where directional interlocks between large corporations reflect the relations of influence. I argue that Russian banks do not derive special information or control benefits from their network position and that this position reflects a subordinate role of banks in today's Russian economy. I explain this subordinate role by the fact that Russian banks are dependent on large industrial corporations (first of all, exporters of raw materials) as major sources of financial capital. An empirical test of hypotheses about the association between banks' reliance on different sources of financial capital and their network positions provides support for this context-specific application of the resource dependence argument.