The "Politics" of Family Business: A Social Network Analysis of Turkey's Koç Family & Their Political Connections

Outside of the United States and the United Kingdom, most firms are part of a pyramidal
network of firms controlled by a single family. For this reason, a growing body of literature concerns family business groups. In Turkey, the Koç family’s business activities accounted for a striking 6.4% of the nation’s GDP and 6.7% of total exports as of 2020. In spite of significant political upheaval, economic downturn, regime changes, and several military coups, the Koç family has maintained significant economic power for almost a century. How? To address this question, I build on a growing body of literature concerning the relationship between business elites and governments. This paper is therefore the first to employ social network analysis (SNA) to systematically identify and characterize relationships between political and economic actors in the context of family business groups. By constructing a novel dataset of all 509 board members of Koç Holding and its 51 subsidiary firms for the past 15 years, I show that the Koç network is relatively large, extremely dense, and centralized. Through network-analytic methods, I calculate several network-level and node-level measures to assess and quantify the level of professional and familial connections the network. Notably, I find strong evidence of substantial political connectedness; 22.6% of all board members and auditors in the network are politically exposed persons.