Where Do Interorganizational Networks Come From?

Organizations enter alliances with each other to access critical resources, but they rely on information from the network of prior alliances to determine with whom to cooperate. These new alliances modify the existing network, prompting an endogenous dynamic between organizational action and network structure that drives the emergence of interorganizational networks. Testing these ideas on alliances formed in three industries over nine years, the authors show that the probability of a new alliance between specific organizations increases with their interdependence, but also with their prior mutual alliances, common third parties, and joint centrality in the alliance network. The differentiation of the emerging network structure, however, mitigates the effect of interdependence and enhances the effect of joint centrality on new alliance formation.