Impact of corporate network position on strategic risk and company’s performance – evidence from Poland

Abstract

PurposeThe purpose of this study is to investigate the links between a company’s position in a corporate network with its financial performance and strategic risk in the context of the largest Central European stock market.Design/methodology/approachThis study integrates the theory of social network analysis (SNA) with corporate governance theory with a special focus on resource dependence theory. Using the framework of network social analysis, the authors use network measures of social capital and embeddedness.FindingsThe results of studying companies listed on the Polish stock exchange indicate that a company’s corporate network position has a significant negative impact on strategic risk while having no influence on its financial performance. The research also highlights the importance of a firm’s corporate governance model for both performance and strategic risk.Research limitations/implicationsThe data collected, and SNA measures used made it possible to conduct a cross-sectional study. Compared to longitudinal studies, this type of study has a couple of disadvantages addressed in the paper. In the future, the dependencies observed in this study should be tested using longer-term data.Originality/valueTo the best of the author’s knowledge, this is the first paper integrating the corporate personal and capital networks to test risk and performance dependencies in the context of Poland’s corporate governance model. The findings and conclusions can also be applied to analyzing Central and Eastern Europe stock markets.