Centrality advantage and the creation of distant ties by peripheral firms in vertical networks

The notion of centrality advantage in network evolution claims that well-connected firms have an advantage in tie creation. Using data from the Japanese automobile industry, this study articulates why the rich get richer in vertical networks and examines how peripheral producers in vertical networks create new distant ties regardless of the disadvantage caused by being peripheral. We find that peripheral producers create distant ties when they enter markets entered by other producers with high centrality and when they have ties with buyers that have higher structural equivalence with other buyers.