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Foreign investment and managerial control in railway ventures.
Lessons from Portuguese railway construction.

Álvaro Ferreira da Silva (Nova School of Business and Economics, Lisbon)

PAPER (pdf), SLIDES (pdf)

Abstract:

Despite the importance of foreign investment in the creation of the Portuguese railways, the impact on governance of the imbalance between the location of operations, and the sources of capital and project management capabilities has not attracted any research yet. The relationship between ownership and control of long-distance business ventures has been a major topic of the literature on the development of free-standing companies during the first global economy. Even if the successful railway companies in Portugal did not have the formal characteristics of a free-standing company, the reconstruction of business decision-making processes reveals that they faced similar challenges to accommodate the agency problems raised by the distance between holders of property rights and managers in the field. In addition, this paper sheds further light on the discussion about ownership, managerial control and location of strategic decisions in firms like railways, utilities or mining companies in peripheral countries during the first global economy.

Keywords: Railways in Portugal; international business; ownership and control; governance

Short cv:

Associate Professor of Economic and Business History (Universidade Nova de Lisboa, Faculdade de Economia). Undergraduate degree in History (Universidade de Lisboa, 1982), Master in Historical Economics and Sociology (Universidade Nova de Lisboa, 1990), Doctor in History (European University Institute, Florence, 1998). His research interests are focused on business and economic history, urban history and the history of technology. Recent works: História Económica de Portugal, 1700-2000 (2005, edited with Pedro Lains), História da Informática em Portugal (2006), “Sanitary revolution and technology in nineteenth-century Lisbon” (2006), “The peculiar customer: conflicts of power and the modern water supply system in Lisbon (1850-1930)” (2007), “Una máquina imperfecta: tecnología sanitaria en Lisboa en la segunda mitad del siglo XIX” (2007), “A família em Portugal no século XVIII: posição familiar dos jovens e as dinâmicas dos grupos domésticos” (2008), “The ‘script’ of a new urban layout: mobility, environment and embellishment. Street’s uses in Lisbon between 1880 and 1920” (Lely Prize at the T2M Conference, International Association for the History of Transportation, Traffic and Mobility, Otawa, 2008), “Foreign capital and problems of agency: the Companhias Reunidas de Gás e Electricidade in Lisbon (1890-1920)” (2008), “Engineers and organizational behaviour: the Companhia Real dos Caminhos de Ferro Portugueses (1870-1885)” (2009), “Padrões de mobilidade interna em Portugal na segunda metade do século XIX” (2009), “In search of the urban variable: Understanding the roots of urban planning in Portugal” (2009), “Street, sanitation and beautification: urban intervention in nineteenth-century Lisbon” (2010), “A economia portuguesa na I República” (2011), “Foreign investment and multinationals in Portugal (1926-1974)” (forthcoming), “A crise orçamental e monetária portuguesa no contexto internacional (1914-1931)”, “Circulation and appropriation of management knowledge: management consulting in Portugal during the early 1970s” (forthcoming).