Interdependence and the social structure of rivalry

Outcome interdependence predisposes firms to simultaneously cooperate and compete. Hence, it may shape the social structure of rivalry. Outcome interdependence may stem from similarities in (a) types of suppliers/buyers, (b) resources, (c) geographic catchment areas, and (d) strategic beliefs of managers. A QAP canonical correlation analysis links multidimensional indicators of interdependence to multiplex ties between organizations. A study of banks in Illinois revealed that geographic proximity is the most important factor driving competition and cooperative alliances. However, certain alliances (e.g., correspondent banking) allow banks to transcend the constraints of this geographic fragmentation. Implications for the relevance of social capital and structural holes are discussed.