Dancing with the Stars: How a Sovereign Fund Shaped Its Network to Become an Institutional Entrepreneur

Abstract

What social network structure enables a process of institutional emergence? This article combines a longitudinal network analysis of investments and cross-sectional interviews of stakeholders in the context of a regional development program to answer this question. Piloted by a Sovereign Development Fund (SDF), the program attracted US$ 50bn of investments between 2006 and 2015 in a region previously ignored by investors. We show that the SDF’s dual identity as ‘Government Representative’ and ‘International Finance Agent’ provided the SDF an opportunity to spur a new institutional logic and engender a new pattern of interactions between actors. The network of co-investments that resulted was a unique shape. The SDF was not a broker, nor was it at the center of a star network. Instead, the SDF controlled several ‘child companies’ that were each at the center of their own star network. The SDF therefore dances with several stars: It trains them, gets access to different fields through them, and lets them “shine” as they adapt to their given context. We conclude that influence, multivocality and experimentation are three essential steps to institutional emergence.

Keywords: Institutional Entrepreneur, Multivocality, Social Network Centrality, Social Skills, Sovereign Development Funds