The sources and consequences of embeddedness for the economic performance of organizations: The network effect

Brian Uzzi*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3431 Scopus citations

Abstract

In this paper, I attempt to advance the concept of embeddedness beyond the level of a programmatic statement by developing a formulation that specifies how embeddedness and network structure affect economic action. On the basis of existing theory and original ethnographies of 23 apparel firms, I develop a systematic scheme that more fully demarcates the unique features, functions, and sources of embeddedness. From this scheme, I derive a set of refutable implications and test their plausibility, using another data set on the network ties of all better dress apparel firms in the New York apparel economy. Results reveal that embeddedness is an exchange system with unique opportunities relative to markets and that firms organized in networks have higher survival chances than do firms which maintain arm's-length market relationships. The positive effect of embeddedness reaches a threshold, however, after which point the positive effect reverses itself.

Original languageEnglish (US)
Pages (from-to)674-698
Number of pages25
JournalAmerican Sociological Review
Volume61
Issue number4
DOIs
StatePublished - Aug 1996

ASJC Scopus subject areas

  • Sociology and Political Science

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