Sources of Franco-German corporate support for the euro: The effects of business network centrality and political connections

Abstract

During the euro crisis of June 2011, 51 representatives of major French and German corporations launched a political campaign in support of the euro. This study shows that firm size facilitated high-quality business contacts but that variables of economic interest were not associated with a higher probability of campaign participation when controlling for relational variables. Instead, the empirical analysis suggests that Franco-German business leaders joined the campaign because (1) their central network position provided them with informational resources to transcend the interest of their firm, and (2) their social and political embeddedness either led to an internalization of pro-euro values or gave them an incentive to improve their long-term reputation with political decision makers who strongly support the euro as part of the European integration project. Thus, the directors’ corporate and political ties facilitated and motivated corporate political action in support of the euro.