The network diameter and its impact on company performance

This study shows how the impact of network evolution on the network´s overall performance is mediated by the network´s diameter. Our principle argument in this paper is that the diameter serves as a criterion to measure the performance of a network structure. A small or reduced diameter indicates tight relationships between the vertices comprising the network. This facilitates higher network capacity and flow between the vertices, which, in turn, leads to better overall performance of the network. On the other hand, a larger diameter leads to performance degradation due to a loosely connected network.