The Evolution of Interfirm Networks: Environmental Effects on Patterns of Network Change

Focusing on network change at both the firm and network levels of analysis will guide a better understanding of the principles behind the building of effective networks.

Abstract

We develop a framework examining the relationship between environmental change and patterns of network change. We propose four patterns of network change (network expansion, network churning, network strengthening, and network shrinking) across four environmental change scenarios. Since network evolution is the result of both environmental context and strategic action, we incorporate strategic orientation as a moderator. Focusing on network change at both the firm and network levels of analysis will guide us toward a better understanding of the principles behind the building of effective networks.