Human capital, social connections, and firm productivity: Evidence from Russian Old Believers

The Old Believers, a persecuted religious minority in the Russian Empire, controlled an over-proportional share of textile firms despite constituting only a small fraction of the population. This article connects the historical entrepreneurial experience of the Old Believers with modern theories of firm productivity and economic development. Drawing on historic and economic literature, the article reviews evidence suggesting that Old Believers' enterprises often demonstrated higher productivity and better performance than firms owned by the rest of the Orthodox population. The article highlights three main explanations for this success, discussed in the literature: high levels of human capital, dense social and confessional networks, and access to financial resources through mutual lending. Particular attention is given to the mechanisms through which social and financial capital influenced productivity in the context of the late industrialization of the Russian Empire. The article also discusses the opportunities and limitations of applying modern firm-level economic theory to historical data from Imperial Russia. The case of Old Believers' entrepreneurship provides a valuable historical setting for testing modern theories of firm productivity, social capital, and resource allocation. The article concludes by identifying areas for future empirical research based on available firm-level historical datasets.