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The Strength of Direct Ties: Evidence from the Electronic Game Industry

Authors/Editors: Claussen, J.
Falck, O.
Grohsjean, T.
Published: 2012
Type: Articles in Refereed Journals (International)
ISBN/ISSN: 0167-7187
Published by: International Journal of Industrial Organization, 30(2), pp. 223-230


We analyze the economic effects of a developer's connectedness in the electronic game industry. Knowledge spillovers between developers should be of special relevance in this knowledge-based industry. We calculate measures for a developer's connectedness to other developers at multiple points in time. In a regression with developer, developing firm, publishing firm, and time fixed effects, we find that the number of a developer's direct ties, i.e., common past experience, has a strong effect on both a game's revenues and critics' scores. The intensity of indirect ties makes no additional contribution to the game's success.