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Is The Structural-Hole Thesis Culturally Parochial ? A Formal Approach *

Being intrigued by a disproportionately small number of empirical studies on Burt’s (1992) structural-hole thesis, as well as the contention that the predictive accuracy of the thesis differs across cultural contexts, this note develops a formal model that helps understand the relationship between culture, social norms, and structural holes. We first present a network model that features cooperation in a closed group and the effects of an actor’s initiation of ties with outgroup members. We then discuss how our model addresses the cultural variation in the outcome of structural holes. Social networks in various levels of human society have been shown to serve as an important form of social capital, providing network members with economic returns and social gains (Lin, 2001). Network scholars in the disciplines of organizational sociology and organizational management have long focused on social capital stemming from an actor’s advantageous structural position in networks (e.g., Burt, 1982, 1992; Coleman, 1990; Podolny 2005). In particular, Burt’s (1992) theory of structural holes provides an innovative and provocative proposition over the benefits of an actor’s network location in accessing social capital. Burt extends Granovetter’s (1973) notion of the “bridge in the network” and suggests that actors located in networks rich in structural holes, which exist between two unconnected contacts, are blessed with two types of benefits: information benefits and control benefits. Nonredundant contacts offer more unique, diverse, and timely access to information benefits, while brokering the connection presents opportunities for greater bargaining power and control benefits over resources or outcomes. Burt’s structural-hole thesis is supported by abundant empirical evidence, along with findings of contingency factors that affect the strength of association between structural holes and information/control benefits (see Burt, 2000 for a review), including the number of peers (Burt, 1997), network content (e.g., Podolny and Baron, 1997), network updating (Rhee, 2004), balance between knowledge and power (Reagans & Zuckerman, 2006), and direct versus secondhand brokerage (Burt, 2007) Despite numerous corroborative studies on the benefits of structural holes in the U.S., however, we observe little research supporting the structural-hole proposition outside of the U.S., particularly, in the Asian settings. There are only a few studies that have attempted to test for the proposition using an Asia-based dataset. Perhaps the most notable is Xiao and Tsui’s (2007) recent study, which finds strong evidence of a negative return to individuals who occupy structural holes in “high commitment” Chinese organizations. Bian’s (1997) study of job search in Tianjin, China also shows that in contrast to the structural hole thesis, ties formed with disconnected others are more likely to be strong than weak. Our review of the publications in an Asia-focused journal (Asia Pacific Journal of Management) and a global-oriented journal (Journal of International Business Studies) shows,