The Effects of Supply Networks on Firm Competitive Behavior

Abstract

This study bridges strategic management and supply chain management domains by examining how firms’ structural characteristics in supply networks influence competitive dynamics. We theorize causal relationships between a firm’s network centrality and its competitive aggressiveness. We then extend the theory to the dyadic level and theorize that interfirm competitive dynamics can be explained by the differential network structure between rival pairs. Findings show that: 1) firms with both low and high centrality in supply networks tend to take more but simpler competitive actions compared to those with moderate centrality; 2) when a pair of rivals occupy network positions with similar centrality, they compete more intensely using similar actions.