Literature on nineteenth-century European railway building has abundantly stressed out the importance of foreign capital in its development. Regardless of the role of state or private initiative, foreign capital was a vital element in many nations’ railway networks, whether in the form of loans to national governments or companies, or ...
(Show more)Literature on nineteenth-century European railway building has abundantly stressed out the importance of foreign capital in its development. Regardless of the role of state or private initiative, foreign capital was a vital element in many nations’ railway networks, whether in the form of loans to national governments or companies, or through direct investment by foreign entrepreneurs. Particularly in the second case, the capacity to influence public policies and decisions could be decisive to make viable the initiative, namely by obtaining certain privileges or even financial support from the state, regional or local authorities.
This was quite common in the Iberian Peninsula, where the financial difficulties of both Portuguese and Spanish governments gave way to foreign initiatives. What was less common was to simultaneously spread this type of influence both in the country of investment and in the country of the investor’s origin. Such was the case in 1881, when an enterprise financed by the banking institutions of Oporto and spearheaded by one of the most important Portuguese businessmen, Henry Burnay, ensured the concession to construct and exploit the two railway connections between Salamanca and the Portuguese border at Barca de Alva (Douro railway line towards Oporto) and Vilar Formoso (Beira Alta railway line towards Figueira da Foz).
To ensure the best financial conditions, Burnay assembled a group of renowned Spanish politicians, with tight bonds both in Madrid and Salamanca, and made use of his influential position close to the Portuguese government. The result was an initiative which ended up being subsidized by the two governments.
As a case study, this paper intends to look at this initiative to understand the relation between public institutions and private agents in a cross-border perspective, with particular attention to social networking as a strategic resource of entrepreneurship.
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