Sunday, February 25, 2007

Brokerage and Closure

I've just been reading Ron Burt's book on Brokerage and Closure (Burt, R., (2005) "Brokerage and Closure: An Introduction to Social Capital", Oxford University Press), which is a great summary of his prolific research to date. He has some interesting graphs on p143 showing the extreme profits available to firms in high brokerage positions in Industries that have a high number of structural holes. In my own research work in the Global IT sector this seemed to hold true especially in the software and Internet sub sectors, in comparison to the hardware subsector where the industry is much more closed. Made me think that a plot of companies on an industry closure vs brokerage might be a very insightful map for future investors!

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