Geography Reference
In-Depth Information
tography. The adjacency matrix of this alliance network between the set of 70 agencies
represents the independent variable. Though the response rate of 37 per cent is not very
high, the respondents represent the majority of the actual business in the market. Many
medium and large players took part in the study and most non-respondents were micro
businesses with often just one self-employed owner, and most of them unknown to the
national business association. Therefore it seems justii ed to assume that the complete
network would look quite similar to the one surveyed. The only alliances missing out in
the survey are peripheral alliances between non-responding microi rms.
Network regressions
Network data violate the assumption of independence between observations and thus
require alternative methods to generate test statistics. Hence, regression analysis uses
the QAP technique to test for associations with the dependent variable. The quadratic
assignment procedure (QAP) calculates the Pearson correlation coei cient for two
observed matrices and compares it with a self-generated distribution of correlations
based on random permutations of the reference matrix (Kilduf and Krackhardt, 1994;
Krackhardt, 1987). All regression analyses were computed with the software package
Ucinet (Borgatti et al., 2002).
5. Results
Visualizing network growth in German stock photography
The study of network evolution is promising especially in early stages of network
growth, since network structure has not yet become fully institutionalized (Kenis and
Knoke, 2002). In the case of stock photo alliances this seems to be the case since it is a
more recent reaction to digitization and competitive shift. New agencies and new ties
in the alliance network remained quite limited throughout the 1990s, with a clear and
disproportional increase since 1999. This increase is rel ected in rights-managed (RM) as
well as royalty-free (RF) photography and also in the domestic rights-managed alliance
network in Germany (Figure 14.1): 46 agencies were founded in the considered period
between 1989 and 2005, while 29 had already been established before 1989.
Correlation analysis of i rm attribute data supports the argument that digitization
and royalty-free photography reduce transactional friction and ease inter-agency coop-
eration. First, companies with RF-photos receive a higher percentage of pictures from
partner agencies and they tend to generate a higher proportion of revenues internation-
ally. At the same time, RF agencies do not dif er in terms of i rm age or employment size.
Second, there is a more general trend that the higher the proportion of digital images, the
higher the share of photo supply through sales partners. Technological and institutional
change thus fosters the emergence of a new division of labour and a growth in inter-
agency sales partnerships.
Figure 14.2 displays four stages of the domestic RM alliance network in i ve-year
intervals between 1990 and 2005. The visualization of this network illustrates the rapid,
exponential expansion of alliances since 2000 only. The network started of from a few
disconnected cores in 1990 that remained rather stable and small throughout the 1990s.
Toward the end of the decade, as the number of new ties increased, one large component
emerged in which two thirds of all alliances are connected either directly or indirectly.
