NETWORK STABILITY: THE ROLE OF GEOGRAPHY AND BROKERAGE STRUCTURE INEQUITY

While the outcomes of brokerage have been extensively investigated, the issue of when and why brokerage structures persist or decay has attracted relatively little research interest. Taking the perspective of the disconnected firms to whom the broker is tied, the “alters,” we argue that structurally induced “inequity” in opportunity, or the broker’s potential recombination of a larger share of alters’ knowledge than vice versa, exerts a destabilizing effect on brokerage persistence. Furthermore, geographic distance, via its role in the cognitive classification of rivals, enhances alters’ tolerance for inequity and contingently weakens the destabilizing effect of structural inequity in knowledge recombination opportunity that benefits the broker. Specifically, we postulate about the sociocognitive prismatic nature of geography in that geographic distance makes it less likely that alter firms see the broker as a rival and are hence less sensitive to inequity. We test our hypotheses with 260 broker and 517 alter firms in the global biopharmaceutical industry from 1985 to 2005, yielding 53,377 triad-year observations using a complementary log-log discrete time survival estimator. Our results support the hypotheses, highlighting the interplay between structural inequity and geographic distance in explaining brokerage decay.