Previous research shows inconsistent findings about the effect of indirect ties and common third parties. This paper conducts a more fine-grained analysis of indirect ties using venture capital investment data. Adopting a coopetition framework, this paper argues that the impact of indirect ties differs depending on whether common third parties are themselves included in the same partnerships and both internal network dynamics and external environment may moderate the effect of indirect ties. We found general support to our argument. This paper makes important contribution to the network formation literature and venture capital syndication research by revealing the varied effect of indirect ties.
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