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.

Keywords: Networks, Organization Theory, Economic Sociology, Strategy and Policy