Corporate competition: A self-organized network

Dan Braha, Blake Stacey and Yaneer Bar-Yam

MPRA Paper from University Library of Munich, Germany

Abstract: A substantial number of studies have extended the work on universal properties in physical systems to complex networks in social, biological, and technological systems. In this paper, we present a complex networks perspective on interfirm organizational networks by mapping, analyzing and modeling the spatial structure of a large interfirm competition network across a variety of sectors and industries within the United States. We propose two micro-dynamic models that are able to reproduce empirically observed characteristics of competition networks as a natural outcome of a minimal set of general mechanisms governing the formation of competition networks. Both models, which utilize different approaches yet apply common principles to network formation give comparable results. There is an asymmetry between companies that are considered competitors, and companies that consider others as their competitors. All companies only consider a small number of other companies as competitors; however, there are a few companies that are considered as competitors by many others. Geographically, the density of corporate headquarters strongly correlates with local population density, and the probability two firms are competitors declines with geographic distance. We construct these properties by growing a corporate network with competitive links using random incorporations modulated by population density and geographic distance. Our new analysis, methodology and empirical results are relevant to various phenomena of social and market behavior, and have implications to research fields such as economic geography, economic sociology, and regional economic development.

Keywords: Organizational networks; Interfirm competition; Economic geography; Social networks; Spatial networks; Network dynamics; Firm size dynamics (search for similar items in EconPapers)
JEL-codes: A14 C0 C15 D0 D21 D4 D40 D85 F0 J10 L0 L1 L11 L13 L14 L16 L2 L22 L25 L6 L7 L8 L9 O1 R0 R11 R12 R3 R58 Z1 Z13 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-com, nep-cse, nep-geo, nep-net and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:32142

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