Reputational Leadership and Preference Similarity:Explaining Organisational Collaboration in Bank Policy Networks

In: James , S & Christopoulos , D 2018 , ' Reputational Leadership and Preference Similarity : Explaining Organisational Collaboration in Bank Policy Networks ' , EUROPEAN JOURNAL OF POLITICAL RESEARCH , vol. 57 , no. 2 , pp. 518-538 . https://doi.org/10.1111/1475-6765.12237

Abstract

This paper seeks to contribute to our understanding of the formation of policy networks. Research suggests that organisations collaborate with those that are perceived to be influential in order to access scarce political resources. Other studies show that organisations prefer to interact with those that share core policy beliefs on the basis of trust. We seek to develop new analytical tools for testing these alternative hypotheses. First, we measure whether perceptions of reputational leadership affect the likelihood of an organisation being the target or instigator of collaboration with others. Second, we test whether the degree of preference similarity between two organisations makes them more or less likely to collaborate. The paper adopts a mixed-methods approach, combining Exponential Random Graph Models (ERGM) with qualitative interviews, to analyse and explain organisational collaboration around UK banking reform. We find that reputational leadership and preference similarity exert a strong, positive and complementary effect on network formation. In particular, leadership is significant whether this is measured as an organisational attribute or as an individually-held perception. We also find evidence of closed or clique-like network structures, and heterophily effects based on organisational type. These results offer significant new insights into the formation of policy networks in the banking sector and the drivers of collaboration between financial organisations.