Toward a Theory of Extended Contact: The Incentives and Opportunities for Bridging Across Network Communities

Abstract

This study investigates the determinants of bridging ties within networks of interconnected firms. Bridging ties are defined as non-redundant connections between firms located in different network communities. We highlight how firms can enter into these relationships due to the incentives and opportunities for action that are embedded in the existing network structure. Specifically, we propose that the dynamics of proximate network structures, which reflect firms" and their partners" direct connections, affect the formation of bridging ties by shaping the value-creation and value-distribution incentives for bridging. We also argue that the evolving global network structure affects firms" propensity to form bridging ties by shaping the structural opportunities for bridging. We test our theory using the network of partnership ties among firms in the global computer industry from 1991 to 2005. We find support for structural incentives and opportunities as influential precursors of bridging ties.

Exploring the Locus of Invention: The Dynamics of Network Communities and Firms' Invention Productivity

“…In contrast, in our scenario we follow prior research (e.g., Burt, 2005;White, 1961) in isolating communities of firms formed by realized interactions among specific sets of corporate actors (McPherson, SmithLovin, & Cook, 2001). In many sparsely connected social systems, these communities typically do not overlap (e.g., Girvan & Newman, 2002;Shipilov, Li, & Greve, 2011;Sytch et al, 2012). Note also that such nonoverlapping communities need not result in a fragmented social structure, since they are often tied together by sparse bridging relationships.…”

Social network contingency, symbolic management, and boundary stretching

“…Broker firms also tend to exhibit patterns of behaviors that make it easy for partners to discern that they are dealing with a broker (Gulati, Sytch, and Tatrynowicz, 2010;Sytch, Tatarynowicz, and Gulati, 2011). For example, broker firms often take noticeable efforts to make it difficult for alters to form direct links with each other (Burt, 1992).…”

Learning horizon and optimal alliance formation

“…As an illustrative example, consider Advanced Micro Devices Inc. (AMD) and National Semiconductor Corporation (NSC) during 1977-1999. 4 Both firms operated mainly in the semiconductors subsector of the high tech information technology industry, a setting that has historically experienced great variation in the level of technological uncertainty, the cost of residual technological uncertainty, and the cost of alliances (e.g., Bresnahan and Greenstein 1999;Frankort 2013;Grove 1996;Kapoor 2013;Schilling 2015;Sytch et al 2011), and so we might expect a priori that the learning horizon may have an effect consistent with Proposition 4.…”

“…The opportunity for non-redundancy appears to be a weak requirement, first, given the hundreds and often thousands of firms populating many industries (e.g., United States Census Bureau 2012). Second, empirical research shows that non-redundancy is prevalent even in networks with high degrees of local redundancy, due to the propensity of some firms to form 'bridging' ties across otherwise disconnected parts of an alliance network (e.g., Powell et al 2005;Rosenkopf and Padula 2008;Schilling and Phelps 2007;Sytch et al 2011). In this more general model, then, not all direct partners of the firm are required to have unique partners themselves: even if only one of a firm's direct partners has one unique partner itself, a distant learning horizon can exist and so the necessary conditions for Propositions 1 and 2 are replicated.…”