Networking Capability, Network Structure, and New Product Development Performance

Abstract

Considering the strategic effects of networking relationships on firm performance, it is important to understand how networking capability drives and exerts its impact on network structural relationships, which in turn affect new product development (NPD) performance. Grounded on dynamic capability view of the firm, we theorized that networking capability fosters NPD and plays a significant role in developing and affecting network structural relationships on NPD performance. We disaggregate networking capability into network partner finding capability and network managing capability. We tested our theoretical predictions, and the findings offer novel insights into the ability of firms in building network structural relationships that enable the firms to successfully develop and commercialize new products. We find that strong ties and bridge ties positively affect NPD performance only when firms have adequate networking capability (managing). Also, we illustrate that strong ties and bridge ties, respectively, mediate the positive relationship between networking capability (finding) and NPD performance. In addition, the findings demonstrate that the synergy of strong ties and bridge ties has highest impact on NPD performance when networking capability (managing) is high. This study, thus, suggests that networking capability and network structure need to be simultaneously considered and integrated to better account for performance.