Institutional Change and Network Evolution: Explorative and Exploitative Tie Formations of Co-Inventors During the Dot-com Bubble in the Research Triangle Region

Max-Peter Menzel, Maryann Feldman and Tom Broekel ()

No 1705, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: We investigate how institutions impact tie formation. In doing so, we describe Venture Capital as institution that can direct firm strategies towards exploration or exploitation. These strategies are translated into tie formations: explorative tie formation produces structural holes as a source of 'good ideas', exploitative tie formation closes structural holes to facilitate the mobilization of resources to put ideas into products. Using the example of co-inventors in ICT in the Research Triangle Park during the dot-com bubble, we expected explorative tie formation during the bubble and exploitative tie formations after its burst. Stochastic Actor Oriented Models did not clearly support our assumptions. We found that the emergence of venture capital lead to a large variance in connection patterns during the bubble, probably resulting from overlapping institutional effects. After the burst of the bubble, these incoherencies disappeared.

Date: 2017-01, Revised 2017-01
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Journal Article: Institutional change and network evolution: explorative and exploitative tie formations of co-inventors during the dot-com bubble in the Research Triangle region (2017)
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