The Small World of Germany and the Durability of National Networks

By Bruce Kogut, G. Walker. American Sociological Review, 2001

502 citations recorded by the source corpus.

The globalization of financial markets and the concomitant restructuring decisions of firms challenge the historical legacy of national systems of governance. German corporate ownership patterns and restructuring events in the 1990's are examined here in this light. The results show that ownership links among German firms constitute a “small world” that has consequences for understanding mergers and acquisitions. Ownership links form closely-knit clusters affirms that are nonetheless highly connected across the network as a whole. Restructuring events fall squarely in the center of this structure. Despite increasing global competition, the German small world tends to replicate itself. To illustrate this robustness, potential disruptions to the observed German network are simulated. This simulation shows that the properties of the small world remain intact even when ownership ties are changed. These findings suggest that a more global economy in Germany need not lead to the dissolution of the ownership structure, but rather may be associated with a deepening of network ties.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/8a5a30d8dd959b077e31f0c7354a0834d615b9fb

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Citations in the corpus

Knowledge Portfolios and The Organization of Innovation Networks (2009, background): “6 Mowery et al. had a slightly more nuanced view and concluded, following Nakamura, Shaver, and Yeung (1996), that some alliances produce "complementary specializa tion" (1996: 87).”
The Network of Global Corporate Control (2011, background): “This literature has also analyzed ownership networks [10,11], but has neglected the structure of control at a global level.”
Organizational network perceptions versus reality: A small world after all? ☆ (2008, methodology): “Some social networks do exhibit dense clusters of actors spanned by relationships that provide convenient conduits for information flow across the network, and are in this sense examples of small worlds: they feature actors clustering together in different parts of the network combined with a high l”
Visualization of interfirm relations in a converging mobile ecosystem (2008, background): “Study contexts include competition in the biotechnology industry (Powell et al., 1996) and the semiconductor industry (Podolny et al., 1996), structure of the corporate elite in Germany (Kogut and Walker, 2001), innovation in the software industry (Iyer et al., 2006), and configurations of global ma”
Innovator networks and regional knowledge base (2008, background): “Drawing on sociological work related to knowledge networks (Granovetter 1973, Burt 1992) economic research such as Newman (1999), Kogut & Walker (2001), Cowan et al. (2004a,b) and Fleming et al. (2005) analyze innovation networks and knowledge diffusion.”
The Consequences of Economic Globalization for Affluent Democracies (2007, background): “Others examine a specific country to see if globalization is altering a distinct tradition of capitalism or conventional firm practices (Ahmadjian & Robbins 2005, Hassel & Schulten 1998, Kogut & Walker 2001).”
A "Small-World" Network Model of Cognitive Insight (2005, background): “Thus I emphasize the more general small-world network properties here. properties in the network of associations formed by interlocking boards of directors (Kogut & Walker, 2001), Broadway musical actors and producers (Uzzi, 2004), and new product development teams within firms (Hansen, 2002).”
National Animosity and Cross-Border Alliances (2013, background): “Ideological and economic conflicts, as well as concords between nations, influence the patterns by which firms operate and organize their ownership structures (Kogut & Walker, 2001).”
A new finance capitalism? Mutual funds and ownership re-concentration in the United States (2008, background): “Second, any institutional investor holding more than $100 million in equity assets must disclose the contents of its portfolio each quarter (form 13F).”
Friends and Foes: The dynamics of dual social structures (2014, background): “Networks of interorganizational partnerships offer a rich and representative domain for studying the embeddedness of economic action and have therefore been explored extensively in prior research (e.g., Gulati & Gargiulo, 1999; Kogut & Walker, 2001; Powell et al., 1996; Uzzi, 1996).”