Abstract
During the last decade, researchers in strategic management have attempted to look into the various aspects of network evolution (Gulati & Gargiulo, 1999; Madhavan, et al., 1998; Powell et al., 2005). However, current research on how networks evolve and how this evolution affects organizational outcomes has been mostly static in nature (Powell et al., 2005). Most studies that look into the evolution of networks have not been able to establish causal relationships since there have been very few studies that employ longitudinal data to analyze networks (McPherson et al., 2001; Burt, 2000). The literature still lacks an understanding of how network characteristics are likely to change as networks expand and contract and how these changing characteristics require a change in the networking behavior of firms? Moreover, existing studies have not yet explained how evolving characteristics of networks affect organizational outputs, nor are there studies that directly examine the potential limits to network growth.
The purpose of this study is to develop and empirically test theory that directly links changes in the structure of the firm’s ego network across time to firm specific outcomes by considering both the benefits and potential costs of changes in the ego network. Specifically, we address the question: How does the evolution of firms’ research based ego networks affect firm performance across time?