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Asymmetric Effects of Fashions on the Formation and Dissolution of Networks: Board Interlocks with Internet Companies, 1996–2006

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  • Lori Qingyuan Yue

    (Marshall School of Business, University of Southern California, Los Angeles, California 90089)

Abstract

This paper extends the contextual perspective of network evolution to account for a more complete process of network evolution by showing that the impacts of fads and fashions on the formation and dissolution of interorganizational networks are asymmetric. Building on contact theory, this paper proposes that direct contact affords a flow of knowledge that counters tendencies to social conformity. Network dissolution differs from network formation in that partners have already obtained direct information. As a result, network dissolution is not as responsive to fads and fashions as network formation, and network structures induced by fads and fashions often survive beyond the life cycle of a fashion. An analysis of the interlocking ties of S&P 1500 firms with Internet companies from 1996 to 2006 supports the view that fads and fashions have asymmetric effects on the evolution of networks and also shows that (1) fads and fashions have a strong impact on the formation of networks but not on their dissolution, (2) the networking behaviors of organizations with direct contact are less induced by fads and fashions, and (3) the networks formed by organizations with direct contact during the heyday of a fashion survive longer.

Suggested Citation

  • Lori Qingyuan Yue, 2012. "Asymmetric Effects of Fashions on the Formation and Dissolution of Networks: Board Interlocks with Internet Companies, 1996–2006," Organization Science, INFORMS, vol. 23(4), pages 1114-1134, August.
    • Handle: RePEc:inm:ororsc:v:23:y:2012:i:4:p:1114-1134
    DOI: 10.1287/orsc.1110.0683
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    Cited by:

    1. Adam M. Kleinbaum, 2018. "Reorganization and Tie Decay Choices," Management Science, INFORMS, vol. 64(5), pages 2219-2237, May.
    2. Michael C. Withers & Michael D. Howard & Laszlo Tihanyi, 2020. "You’ve Got a Friend: Examining Board Interlock Formation After Financial Restatements," Organization Science, INFORMS, vol. 31(3), pages 742-769, May.
    3. Julia Brennecke & Olaf N. Rank, 2017. "Tie heterogeneity in networks of interlocking directorates: a cost–benefit approach to firms’ tie choice," Business Research, Springer;German Academic Association for Business Research, vol. 10(1), pages 97-122, June.
    4. Ashish Arora & Michelle Gittelman & Sarah Kaplan & John Lynch & Will Mitchell & Nicolaj Siggelkow & Ji Youn (Rose) Kim & Michael Howard & Emily Cox Pahnke & Warren Boeker, 2016. "Understanding network formation in strategy research: Exponential random graph models," Strategic Management Journal, Wiley Blackwell, vol. 37(1), pages 22-44, January.
    5. Olga A. Novoselova, 2022. "What matters for interorganizational connectedness? Locating the drivers of multiplex corporate networks," Strategic Management Journal, Wiley Blackwell, vol. 43(4), pages 872-899, April.
    6. Eesley, Charles & Wang, Yanbo, 2017. "Social influence in career choice: Evidence from a randomized field experiment on entrepreneurial mentorship," Research Policy, Elsevier, vol. 46(3), pages 636-650.
    7. Gerges-Yammine, Rand & Ter Wal, Anne L.J., 2023. "Firm exit from open multiparty alliances: The role of social influence, uncertainty, and interfirm imitation in collective technology development," Research Policy, Elsevier, vol. 52(4).
    8. Wang, Yujie & Tsang, Albert & Xiang, Yi & Yao, Daifei (Troy), 2023. "Corporate social responsibility misconduct and formation of board interlocks," Journal of Financial Stability, Elsevier, vol. 67(C).

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