Status and stretch: The effect of network status on collaboration with ‘distant’ partners

Although ‘distant’ partners provide diverse information and resources, firms tend to form ‘local’ ties, favoring partners who are more similar, familiar, or spatially proximate. This underscores the need to investigate how distant ties originate—specifically, identifying the conditions under which firms are more likely to establish distant ties, and when they are not. In this study, we emphasize network status as a key determinant in the formation of interfirm distant ties. Analyzing syndication networks of U.S. venture capital (VC) firms, we establish two sets of key findings. First, we emphasize a balancing imperative in partner selection, whereby firms tend to choose partners that are ‘local’ in one dimension but ‘distant’ in another. Second, and more importantly, our results demonstrate that network status significantly shapes the balancing imperative: high-status firms exhibit a stronger propensity to bridge multiple tie distances simultaneously, unless social distance is involved. These findings extend our knowledge on status and network dynamics.