Empirics of Dynamic Network in Actor-Oriented Model:Panel Estimation of the Parameters of Co-evolution of Network and Behavior Effects in Business Relations

Personal characteristics of individuals in business networks significantly influence the trading relations in supply chain management, especially when business environment is largely characterized by group based or family centric enterprises. The dynamics of actor linking as well as delinking in the network over time evolves a specific structure for the network that depends crucially on personal attributes of the traders. In this study, the topology of dynamic evolution of network and behavior effects in a business network among dealers in construction industry in a small town in India have been analyzed by using the actor-based dynamic network modeling approach. Using panel data, the SIENA estimates of the co-evolution of network parameters reveal that the dynamic network structure evolves over time, the individual attributes contribute to the changing dynamics of the evolving network, and the evolving network structure itself influences the establishment or severing of ties by traders in the network. The emerging empirical network is more of a rewired structure, with nodes linking and delinking at random but with specific estimated probabilities.