CENTRALITY AND DENSITY IN INTERFIRM NETWORKS: A STUDY OF AN ETHANOL LOCAL PRODUCTIVE ARRANGEMENT DOI:10.5773/rai.v8i1.456

Abstract

This paper analyzes centrality and density in a network of companies belonging to the Local Ethanol Productive Arrangement of Priacicaba. The study identifies the set of companies that make up the arrangement and the potential for formation of the vertical, horizontal and interpersonal networks. Although the study of industrial clusters has traditionally belonged to the field of the economics, it has recently begun to receive increasing attention by network analysts in the management studies area. We conclude that network position influences exchange possibilities as well as change and innovation processes. Our methodology is descriptive, exploratory and qualitative, accomplished through field research which samples 7 direct and 22 indirectly linked companies nonrandomly. We used matrices, sociograms and graphs to measure centrality and density in the LPA and describe the network.. These techniques uncovered a diffuse but integrated network characterized by personal cooperative relationships which supported commercial agreements. We also concluded that the establishment of a formal local productive arrangement was very important for the development of a variety of network linkages. Our study further identified different strategic postures on the part of different actors in the LPA and it contributes to an understanding of the relationship between firms and institutions in LPAs.