LE Tilburg, a.tatarynowicz@uvt.nl T his paper explores the interplay between social structure and economic action by examining some of the evolutionary dynamics of an emergent network that coalesces into a small-world system. The study highlights the small-world system's evolutionary dynamics at both the macro level of the network and the micro level of an individual actor. This dual analytical lens helps establish that, in competitive and information-intensive settings, a small-world system could be a highly dynamic structure that follows an inverted U-shaped evolutionary pattern, wherein an increase in the small-worldliness of the system is followed by its later decline as a result of three factors: (1) the recursive relationship between the evolving social structure and individual actors' formation of bridging ties, which eventually homogenizes the information space and decreases actors' propensity to form bridging ties, creating a globally separated network; (2) self-containment of the smallworld network, or increasing homogenization of the social system, which makes the small world less accepting of and less attractive to new actors, thereby limiting formation of bridging ties to outside clusters; and (3) fragmentation of the smallworld network, or the small-world system's inability to retain current clusters. The study uses data on interorganizational tie formation in the global computer industry in the period from 1996 to 2005 to test the hypothesized relationships.

Departing from prior research analyzing the implications of social structure for actors' outcomes by applying either an ego network or a global network perspective, this study examines the implications of network communities for the invention productivity of firms. Network communities represent dense and nonoverlapping structural groups of actors in a social system. A network community lens helps identify new ways to study firms' access to diverse knowledge inputs in a dynamic system of interorganizational relationships. Specifically, we examine how the membership dynamics of a network community affect the invention productivity of member firms by either enabling or constraining access to broad, diverse knowledge inputs. Our findings suggest, first, that a firm reaps the greatest invention benefits in a network community with moderate levels of membership turnover. Second, a firm attains the greatest invention productivity when its own rate of movement across different network communities is moderate. Third, we find that community members located in the core of their network community can benefit more from membership dynamics and prior community affiliations than those on its periphery. In empirical analyses, we use the evolving community structure of the network of interorganizational partnerships in the global computer industry over 1981-2001 to predict firms' patenting rates.

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