Geography Reference
In-Depth Information
regions, Hamburg, Munich, Berlin, Frankfurt and Cologne (Figure 14.3). Regression
analysis shows that if two i rms are located in the same metropolitan region, they are
more likely to have a licence agreement. Though the association is highly signii cant,
again, location does not explain more than 0.4 per cent of overall variation and thus can
only be an auxiliary condition for alliance formation. The analysis of a series of year-
to- year regressions of ers an additional and quite remarkable i nding. Over the ten-year
period since 1995, co-location has become increasingly important in the structuration of
alliances. While until 1999, the pattern of domestic sales partnerships was independent
from geography, the new ties in the network have been increasingly constrained by geo-
graphical propinquity within the dominant metropolitan regions. The positive ef ect of
co-location in the same metropolitan region has grown steadily over the last i ve years,
yet remaining a highly contingent condition for tie formation.
Popularity bias
The argument about accumulative advantage predicts that a partner
with many previous contacts is more likely to have new ties than a partner with only a
few prior relations. Evidence from the regression analysis suggests that the higher the
dif erence in the number of licence agreements between a pair of agencies, the more
likely are they to have a relationship. This result applies to both licence-giving and
licence-taking, and rel ects the overall centralization of alliances on a smaller number of
highly connected agencies. In line with the former hypotheses, however, popularity bias
accounts for less than 1 per cent of the variance in the distribution of network ties.
Multiconnectivity
Finally, the argument of multiconnectivity theorizes that multiple
indirect linkages between partners enhance the formation of direct ties between these
organizations. In comparison with the other hypotheses, this argument seems best to
represent the pattern of licence agreements in the German stock photography market.
Point connectivity as well as geodesic count are highly signii cant and explain around 20
per cent of the variance in the distribution of sales alliances. Both measures particularly
focus on unconnected i rms in the network and develop notions of the quality of their
indirect interconnection through third parties. If there are many dif erent intermediate
contacts between any two i rms, and if there are many alternative shortest connections
between the two, they can be considered as being multiply connected (multiconnectivity)
- although there is no direct link between them. The analysis of a series of year-to-year
regressions reinforces this association. The point connectivity and geodesic count for
each pair of agencies in year
t
n
explain roughly between 40 per cent and 60 per cent of the
network structure in each subsequent year
t
n+
1
. In addition, the ten-year time series since
1995 conveys that although both measures are continuously signii cant, their explana-
tory value has suf ered in the last couple of years because more and more new ties enter
the alliance network and challenge the existing structure (Table 14.3). One conclusion
might be that when networks face major expansion and high rates of new tie formation,
the incumbent network structure imposes less constraint on new ties and may experience
a period of path-destruction.
6. Discussion and conclusion
This chapter has sought to combine research on network evolution with an evolutionary
approach to economic geography. A number of dif erent theoretical arguments about
