The dynamics of interfirm networks along the industry life cycle: The case of the global video game industry, 1987–2007
TL;DR: In this article, the formation of network ties between firms along the life cycle of a creative industry is studied, focusing on three mechanisms that drive network formation: (i) network heterogeneity which stresses a path-dependent change originating from previous network structures, (ii) five forms of proximity (e.g. geographical proximity) which ascribe tieformation to the similarity of attributes of firms and (iii) individual characteristics which refer to the heterogeneity in the capabilities of firms to exploit external knowledge.
Abstract: In this article, we study the formation of network ties between firms along the life cycle of a
creative industry. We focus on three mechanisms that drive network formation: (i) network
endogeneity which stresses a path-dependent change originating from previous network
structures, (ii) five forms of proximity (e.g. geographical proximity) which ascribe tie
formation to the similarity of attributes of firms and (iii) individual characteristics which refer
to the heterogeneity in the capabilities of firms to exploit external knowledge. The article
employs a stochastic actor-oriented model to estimate the – changing – effects of these
mechanisms on the formation of the interfirm network in the global video game industry
from 1987 to 2007. Our findings indicate that, on average, the direction of the effects of
the three mechanisms are stable over time, but that their weights change with the degree of
maturity of the industry. To an increasing extent, video game firms tend to prefer to partner
over short distances and with more cognitively similar firms as the industry evolves.
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01 Jan 2008
TL;DR: In this article, the authors argue that rational actors make their organizations increasingly similar as they try to change them, and describe three isomorphic processes-coercive, mimetic, and normative.
Abstract: What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.
2,134 citations
TL;DR: In this paper, the authors propose a critical assessment and identifies a number of crucial issues for future research, including disentanglement of various types of capabilities that make regions diversify, inclusion of more geographical wisdom in the study of regional diversification, like a focus on the effects of territory-specific contexts, such as institutions, and a thorough investigation in the conditioning factors of related and unrelated diversification in regions.
Abstract: Relatedness as driver of regional diversification: a research agenda. Regional Studies. The regional diversification literature claims that regions diversify in new activities related to their existing activities from which new activities draw on and combine local capabilities. The paper offers a critical assessment and identifies a number of crucial issues for future research. It calls for (1) a disentanglement of the various types of capabilities that make regions diversify; (2) the inclusion of more geographical wisdom in the study of regional diversification, like a focus on the effects of territory-specific contexts, such as institutions; (3) a thorough investigation in the conditioning factors of related and unrelated diversification in regions; and (4) a micro-perspective on regional diversification that assesses the role of economic and institutional agents in a multi-scalar perspective.
381 citations
TL;DR: Balland et al. as discussed by the authors proposed a dynamic extension of the proximity framework that accounts for co-evolutionary dynamics between knowledge networking and proximity, which captures the processes of learning (cognitive proximity), integration (organizational proximity), decoupling (social proximity), institutionalization (institutional proximity), and agglomeration (geographical proximity).
Abstract: Balland P.-A., Boschma R. and Frenken K. Proximity and innovation: from statics to dynamics, Regional Studies. Despite theoretical and empirical advances, the proximity framework has remained essentially static. A dynamic extension of the proximity framework is proposed that accounts for co-evolutionary dynamics between knowledge networking and proximity. For each proximity dimension, how proximities might increase over time as a result of past knowledge ties is described. These dynamics are captured through the processes of learning (cognitive proximity), integration (organizational proximity), decoupling (social proximity), institutionalization (institutional proximity), and agglomeration (geographical proximity). The paper ends with a discussion of several avenues for future research on the dynamics of knowledge networking and proximity.
340 citations
TL;DR: In this article, the authors proposed that the relationship between entrepreneurship, innovation and regional growth is governed by a series of network dynamics and that the nature of the networks formed by entrepreneurial firms is a key determinant of regional growth differentials.
Abstract: Despite the growing acknowledgement that entrepreneurship is an important driver of regional innovation and growth, the role of the networks in these processes has been less formally examined. In order to address this gap, this paper proposes that the relationship between entrepreneurship, innovation and regional growth is governed by a series of network dynamics. Drawing upon aspects of endogenous growth theory and the knowledge spillover theory of entrepreneurship, it is proposed that the nature of the networks formed by entrepreneurial firms is a key determinant of regional growth differentials. In particular, network capital, in the form of investments in strategic relations to gain access to knowledge, is considered to mediate the relationship between entrepreneurship and innovation-based regional growth. It is suggested that network dynamics should be further incorporated into theories concerning the link between knowledge spillovers, entrepreneurship and regional growth. The paper concludes with a series of theoretical, entrepreneurial and policy implications emerging from the study.
228 citations
Cites background from "The dynamics of interfirm networks ..."
...…life cycle theory contends that firms will generally fit within one of three broad phases – fluid, transitional, and mature – relating to the developmental stage of the industry within which they operate (Utterback and Abernathy 1975; Klepper 1997; Ter Wal and Boschma 2011; Balland et al. 2013)....
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References
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TL;DR: A model based on these two ingredients reproduces the observed stationary scale-free distributions, which indicates that the development of large networks is governed by robust self-organizing phenomena that go beyond the particulars of the individual systems.
Abstract: Systems as diverse as genetic networks or the World Wide Web are best described as networks with complex topology. A common property of many large networks is that the vertex connectivities follow a scale-free power-law distribution. This feature was found to be a consequence of two generic mechanisms: (i) networks expand continuously by the addition of new vertices, and (ii) new vertices attach preferentially to sites that are already well connected. A model based on these two ingredients reproduces the observed stationary scale-free distributions, which indicates that the development of large networks is governed by robust self-organizing phenomena that go beyond the particulars of the individual systems.
33,771 citations
"The dynamics of interfirm networks ..." refers background in this paper
...Preferential attachment describes the attractiveness of central actors comparatively to others, in which new nodes entering the network tend to form ties with incumbent nodes according to their degree distribution (Barabási and Albert, 1999)....
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...Preferential attachment describes the attractiveness of central actors comparatively to others, in which new nodes entering the network tend to form ties with incumbent nodes according to their degree distribution (Barabási and Albert, 1999)....
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TL;DR: In this paper, the authors argue that rational actors make their organizations increasingly similar as they try to change them, and describe three isomorphic processes-coercive, mimetic, and normative.
Abstract: What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.
32,981 citations
TL;DR: In this paper, the authors argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities.
Abstract: In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures. **
31,623 citations
"The dynamics of interfirm networks ..." refers background in this paper
...being proximate in cognitive or geographical terms) and (iii) individual characteristics which affect, for instance, the capacity to exploit external knowledge (Cohen and Levinthal, 1990)....
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...…structural mechanisms, reproducing themselves over time; (ii) similarity between attributes of firms (e.g. being proximate in cognitive or geographical terms) and (iii) individual characteristics which affect, for instance, the capacity to exploit external knowledge (Cohen and Levinthal, 1990)....
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TL;DR: The homophily principle as mentioned in this paper states that similarity breeds connection, and that people's personal networks are homogeneous with regard to many sociodemographic, behavioral, and intrapersonal characteristics.
Abstract: Similarity breeds connection. This principle—the homophily principle—structures network ties of every type, including marriage, friendship, work, advice, support, information transfer, exchange, comembership, and other types of relationship. The result is that people's personal networks are homogeneous with regard to many sociodemographic, behavioral, and intrapersonal characteristics. Homophily limits people's social worlds in a way that has powerful implications for the information they receive, the attitudes they form, and the interactions they experience. Homophily in race and ethnicity creates the strongest divides in our personal environments, with age, religion, education, occupation, and gender following in roughly that order. Geographic propinquity, families, organizations, and isomorphic positions in social systems all create contexts in which homophilous relations form. Ties between nonsimilar individuals also dissolve at a higher rate, which sets the stage for the formation of niches (localize...
15,738 citations
"The dynamics of interfirm networks ..." refers background in this paper
...Sociologists refer to the term homophily for explaining the tendency of social groups to form around actors that have similar tastes, preferences, ethnic background or social status (McPherson et al., 2001)....
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..., 2010), and indicates why all nodes are not able to be fully connected to all others (McPherson et al., 2001)....
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Journal Article•
9,237 citations