The Impact of Social Network Information Search on Decision Making: A Study of Offshoring in the Danish Digital Visual Cluster

Abstract

This thesis investigates how information search in social networks impacts the offshoring location decisions of firms in the Danish digital visual cluster. Specifically, impact refers to the extent to which the firms will make the same decisions and the rationality of these decisions. The research question is empirically investigated using a survey strategy where a questionnaire has been distributed to nearly 500 Danish production firms within the industries of film, TV, advertising, and digital games. Regretfully, poor response and completion rates significantly constrain the reliability of the results, making the most important findings theoretical. Combining network theory and information cost economics, I argue that information resides within networks. Because real-life networks are asymmetric, global network structures condition the amount of information which infuses into a cluster. The rationality of the firms’ offshoring location decisions will improve when the cluster is infused with large amounts of information. Further, local network structures influence how information diffuses within a cluster. Symmetry in the local network structures promotes equal distributions of information, thereby inducing homogeneity in transaction decisions. Arguably, these principles can be applied to understand how social network information search impacts the offshoring location decisions of firms in the Danish digital visual cluster.