This Article Free Full Text (Free PDF) Free References Alert me when this article is cited Alert me if a correction is posted Citation Map Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Citing Articles via Scopus Google Scholar Articles by Shipilov, A. V. Search for Related Content Social Bookmarking                         What's this?

Should you bank on your network? Relational and positional embeddedness in the making of financial capital

INSEAD, France, shipilov{at}insead.edu

This study explores the mechanisms through which relational embeddedness affects the performance of banks in syndication networks formed in the Canadian investment banking industry. I argue that banks have a choice between building embedded network ties that are overlaid with social context and arm’s-length ties that facilitate individual competition. Contrary to the arguments advanced in previous studies, I propose that maintaining a mix of arm’s-length and embedded relationships represents a disadvantageous network strategy. Such strategy not only simultaneously exposes investment banks to competition from their peers, relying primarily upon embedded or arm’s-length ties, but also sends confusing signals about banks’ networking behavior. I also propose that the link between relational embeddedness and performance is moderated by banks’ positional embeddedness, reflected in their status, and find that banks of higher status extract greater benefits from maintaining embedded ties, as compared with banks of lower status.

Key Words: embeddedness • investment banking • networks • status

Strategic Organization, Vol. 3, No. 3, 279-309 (2005)
DOI: 10.1177/1476127005055793


CiteULike    Complore    Connotea    Del.icio.us    Digg    Reddit    Technorati    Twitter    What's this?