The Influence of Corporate Networks on the Competitive Advantage of High Technology Enterprises in China: The Mediating Effects of Dynamic Capacities and Ambidextrous Combination

Huayun Wang,Zhuoran Zhang

doi:10.3390/ijfs9030042

Abstract

As an essential channel to obtain external resources and information, corporate networks have played a key role in enhancing the competitive advantage of firms, especially during the period where most of the high-technology firms in China started to directly seek means other than import technology to boost their competitive advantages. However, there was still ambiguity concerning how exactly corporate networks would affect comparative advantage. This study sought to expose the internal mechanisms among two aspects of corporate networks, namely, the network strength and the network centrality, and competitive advantage. We also examined the mediating effects of the dynamic capabilities and the ambidextrous combination. Managers of 384 high technology enterprises in China were interviewed via telephone calls during the period of January to June 2020. The data were analyzed by utilizing the structural equation method, and the results show that both dynamic capacities and the ambidextrous combination significantly mediate the relationship between corporate networks and firms’ comparative advantage, where the two mediators also had a significant relationship with each other. Moreover, the multigroup analysis also unveiled that the corporate networks had a greater impact on competitive advantage and the ambidextrous combination in the manufacturing sector, while small-sized enterprises and service enterprises would benefit more than others from the improvement in the dynamic capabilities and ambidextrous combination. Our findings fill the gap in the literature and provide useful information to firms in China on how to allocate internal and external resources to enhance their competitive advantages.

Highlights

A corporate network is a strategic alliance formed by multiple enterprises based on division and collaboration to achieve strategic goals (Tsou and Hsu 2015), which has been an important channel for enterprises to obtain external resources
The empirical result from the structural equation modeling confirms that both aspects of the corporate networks have a significant positive relationship with the firms’ competitive advantages (H1a and Hypothesis 1b (H1b) accepted), which is in line with the findings of the previous literature and indicates that firms’ ability to maintain a strong network and an adequate position within the network is essential for firms’ success in China
Our findings show that dynamic capabilities enabled the impact of the tie strength on competitive advantage to increase from 0.181 to 0.28, and that they increased the impact of network centrality on competitive advantage from 0.23 to 0.298; the ambidextrous combination increased the impact of network centrality on competitive advantage by 0.125

Summary

Introduction

A corporate network is a strategic alliance formed by multiple enterprises based on division and collaboration to achieve strategic goals (Tsou and Hsu 2015), which has been an important channel for enterprises to obtain external resources. Internal resources are usually scarce, and the limited internal resources render supporting strategic development difficult; obtaining external resources and information from corporate networks has become necessary and crucial for enterprises facing those difficulties (Teece 2018a). Previous studies have shown that corporate networks could generate sufficient external resources and information to ease the scarcity of internal resources, leading to a higher level of innovation and competitive advantages (Shaarawy and Abdelghaffar 2017). Whether corporate networks are a direct source of competitive advantage remains unclear

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