Network Of Firms Research Articles

The Impact of Supply Chain Network Centrality on Sustainable Mergers and Acquisitions: Evidence from China

Mergers and acquisitions (M&As) are key drivers for resource integration and the operational efficiency of enterprises. Companies that hold central positions within supply chains may leverage their strategic location to reduce information asymmetry, enhancing their ability to engage in sustainable activities. However, research on the role of supply chain network centrality in M&A decisions remains underexplored. This study aims to empirically examine whether and how centrality in supply chain networks enhances the likelihood and success of M&A activities, contributing to both theory and practice in corporate strategy. In particular, we construct a novel measure of firm centrality within the supply chain and utilize panel data from Chinese A-share listed companies spanning 2008 to 2021. Our findings reveal that the central position of supply chain networks promotes the probability and frequency of mergers and acquisitions. Mechanism analysis reveals that gaining information advantages and relieving financial constraints are two key channels through which the supply chain network promotes mergers and acquisitions. Furthermore, the effects are more pronounced for firms with non-state ownership, with closer proximity to customers or suppliers, with higher operational risk, and with growth and decline phases. A series of robustness tests support these results, including alternative measures, alternative estimating methods, and sub-sample tests. Moreover, central supply chain companies exhibit better long-term financial performance following mergers and acquisitions. This paper enriches our understanding of the roles of supply chain networks in firms’ mergers and acquisitions and holds important practical implications for companies seeking to achieve sustainable and long-term development.

Parent Firm Network Dynamics and Foreign Subsidiary Divestment

Parent Firm Network Dynamics and Foreign Subsidiary Divestment

Investigating the use of network analysis metrics to benchmark Industrial Symbiosis development

Circular economy (CE) aims to reduce natural resource consumption, waste generation, and related detrimental environmental, social, and economic impacts by keeping valuable materials circulating in the economy. Industrial Symbiosis (IS) contributes to CE through byproduct-exchange partnerships between firms, reducing raw material use, emissions, and waste generation, while promoting the economic growth of partner firms. However, most IS projects fail in the early stages and do not reap the full sustainability benefits of IS. A significant reason for the failure of early-stage IS projects is the lack of knowledge regarding the strategic organization of IS networks. Quantifying IS network organization and operational characteristics and benchmarking IS development can address this challenge, and enable knowledge transfer regarding IS network organization from mature IS networks to guide the advancement of new IS projects. This investigation tests multiple Ecological Network Analysis (ENA) and Social Network Analysis (SNA) metrics using three real-world IS case studies, as potential IS benchmarking tools. The results of the investigation show that ENA and SNA metrics can be used to compare IS networks and identify differences in the following characteristics: Partnership prevalence, producer–consumer relationships, linkage distribution, resource utilization, effect of indirect firm relationships, network cohesion, and network centralization. The values of the multiple network analysis metrics are found to be aligned with the development time of the IS networks and the qualitative markers of IS development stages as identified in the literature. For example, the analysis of producer–consumer relationships indicated that more than 50% of the consumer firms in the early stage IS networks had only one supplier partnership compared to less than 30% of the firms in the most mature IS network. Similarly, the analysis of network cohesion showed that the early-stage IS networks had (on average) five different isolated groups of firms compared to one cohesive group of firms in the more mature IS networks. This investigation demonstrates that network analysis of IS projects only requires anonymized and non-proprietary data, and identifies data-collection and modeling standards needed to develop an IS benchmarking framework using network analysis. The promising results of this investigation motivate future work into these standardization needs and the development of IS benchmarks using network analysis.

Firm Networks and Asset Returns

Abstract Changes in the propagation of shocks along firm networks are important to understanding aggregate and cross-sectional features of stock returns. When calibrated to match key characteristics of supplier–customer networks in the United States, a model in which firms are interlinked via enduring relationships generates long-run consumption risks, high and volatile risk premiums, and a small and stable risk-free rate. The model also matches cross-sectional patterns of portfolio returns sorted by firm centrality, a feature unaccounted for by standard asset pricing models. (JEL C67, E30, G12, L14)

Board network and ESG performance: Evidence from China

AbstractAs ESG (Environmental, Social, and Governance) principles increasingly shape the trajectory of global economic and societal sustainability, our study delves into how a firm's network dynamics influence its ESG performance within the Chinese landscape spanning from 2011 to 2020. Drawing insights from agency theory, resource dependence theory, and social network theory, we uncover a notable correlation between board interlocking and ESG performance. This correlation suggests that well‐connected directors can potentially enhance a firm's ESG performance by facilitating information gathering, monitoring, advising, and leveraging influence to address stakeholders' concerns. Moreover, our analysis reveals that the characteristics of ownership structure, as gauged by indicators such as institutional ownership, control‐cash flow wedge, and state‐owned ownership, serve as positive moderators in this relationship. Conversely, board structure, as evaluated by board independence, does not exhibit a significant moderating effect. Additionally, we uncover noteworthy mediating effects of firm size and institutional shareholding on the relationship between board interlocking and ESG performance. Importantly, our findings hold robust across various sensitivity analyses, including alternative model specifications, variable definitions, and strategies to mitigate potential endogeneity concerns.

Universities and Firm Performance: Evidence from Germany

Abstract This paper analyses the impact of universities on firm performance based on the universe of firms in Germany from 2013 to 2017. From a regional perspective, firms have 0.92 % more revenues per employee in counties with a university than in a county without a university. To address potential endogeneity concerns, I focus on a subsample of universities, founded for political reasons. Analysing different types of German universities indicates that the high-skilled regional labour supply is important for the positive impact of universities, while proximity to the knowledge spillovers of research-intensive universities is associated with weaker firm performance. The latter finding is at least partially explained by the networks of multinational firms.

Foreign market network and internationalization of domestic firms: A systematic literature review

This study examined foreign market network and internationalization of domestic firms. It was carried out to identify the contemporary foreign-market networks available for domestic firms seeking internationalization; the ways in which foreign market network facilitates the internationalization of domestic firms; and the major barriers to the internationalization of domestic firms in contemporary extant literature. To that end, a systematic literature review methodology was adopted. Through a thorough search process supported by a set of stringent inclusion-exclusion criteria, 103 relevant articles were included in this review. The articles were analyzed using in-depth content analysis method augmented with descriptive statistics. The study found that the contemporary foreign-market networks for internationalization can be grouped into 18 categories. It was also found that foreign market network can enhance the internationalization agenda of domestic forms by providing access to distribution channels, risk mitigation, and enabling access to market knowledge and insights, among other key findings. Therefore, the study recommended the following, among others: Domestic firms seeking to internationalize should seek out foreign market networks using personal contacts, social media and the internet generally in order to gather substantial market intelligence about the countries to which they intend to expand their operations; and domestic firms can leverage foreign market networks by establishing strategic partnerships with local distributors, leveraging international trade associations, and utilizing cross-border collaborations to gain market insights, access distribution channels, and build relationships with key stakeholders, facilitating the successful execution of their internationalization strategy.

Managing firm risk: supply chain board members and the contingent effects of firm network architectures

Managing firm risk: supply chain board members and the contingent effects of firm network architectures

Global Value Chains, Labor Rights, and the Nature of Transnational Law

Abstract This Article develops a framework to analyze the laws that bear on working conditions in global value chains (GVCs), a production structure based on hierarchical international firm networks. In so doing, it contributes to broader debates about how to conceptualize law under contemporary “globalization.” The Article argues against the widespread view that GVCs—and today’s globalized legal order—are fundamentally different from a prior regime of Westphalian state sovereignty. Instead of this vision of globalization as rupture with the past, the Article proposes a “monist” perspective according to which the state has always been embedded in a single body of conflicting and contested transnational legal rules. In this view, sovereign power was never something of which all states could have more or less. Rather, sovereignty is a bundle of rights that can only ever be distributed to specific states vis-à-vis one another and private actors like labor unions and corporations. The Article emphasizes the analytical benefits of this conceptualization of transnational law for policy projects like those of improving working conditions in GVCs and empowering workers globally.

The Power of Political Connections: Evidence from Korean Chaebols and Government Procurement

ABSTRACT This paper investigates the impact of political connections on the performance of Korean chaebol companies. We use two indicators to measure the ability and diversity of political connections and find that chaebol companies are more likely to establish political connections compared to non-chaebol firms, which gives them an advantageous position in government procurement bidding. Significantly, our findings indicate that political connections correlate positively with the monetary value of government contracts secured by chaebols, underscoring the direct economic benefits of these connections. Overall, our study sheds light on the motivation for the political networks of chaebol firms and contributes to a better understanding of the direct benefits of political connections.

Growing, learning, and connecting: Deciphering the complex relationship between government customer concentration and firm performance

AbstractThe interplay between a firm's customer portfolio and the firm's performance presents a theoretical conundrum that challenges traditional supply chains. In particular, the role of government customer concentration—how extensively a firm incorporates government entities as part of its customer base—emerges as a pivotal factor with the potential to both bolster and burden firm performance. Analyzing 3,643 firm‐year observations from the U.S. Federal Procurement Data System‐Next Generation, Compustat, and FactSet Revere reveals an inverse U‐shaped relationship between government customer concentration and firm performance. Excessive or insufficient government customer concentration adversely impacts performance, suggesting that a strategic balance is essential. Firm size, absorptive capacity, and network embeddedness are crucial in navigating this complex relationship, guiding a firm toward optimizing its government customer portfolio. This research advances the discourse on customer base management, underscoring the essential strategic considerations for firms interacting with government buyers.

An investigation of corporate social responsibility conformity: The roles of network prominence and supply chain partners

AbstractNumerous studies on corporate social responsibility (CSR) indicate that firms adopt CSR practices for various reasons related to their supply chain. However, the necessity to conform to a firm's own industry CSR norm is overlooked. Conforming to one's industry CSR norm—a herding behavior known as CSR conformity—ensures firm in‐group legitimacy and preserves internal resources for core business activities. On the other hand, deviating from industry norms sets a firm apart from its peers, making the firm more appealing to supply chain partners. Motivated by this dilemma, this study draws on middle‐status conformity theory and explores how a firm's network prominence determines its CSR conformity. Panel data analyses of 1650 firm‐year observations reveal an inverse U‐shaped relationship between firm network prominence and its CSR conformity, indicating that firms with a mid‐level network prominence engage in higher CSR conformity. However, the inverse U is flattened when a firm's supply chain partners (and their respective industries) share similar CSR standards, suggesting that a firm can only prioritize its own industry CSR norms if its supply chain partners share a compatible CSR standard. These findings highlight the importance of understanding CSR from an organizational conformity perspective, especially in the context of supply chain network.

Knowledge Sharing and Cumulative Innovation in Business Networks

How can we explain the success of cooperative networks of firms which share innovations, such as Silicon Valley or the Open Source community? This paper shows that if innovations are cumulative, making an invention publicly available to a network of firms may be valuable if the firm expects to benefit from future improvements made by other firms. A cooperative equilibrium where all innovations are made public is shown to exist under certain conditions. Furthermore, such an equilibrium does not rest on punishment strategies being followed after a deviation: it is optimal not to deviate regardless of another firm’s actions following a deviation. A cooperative equilibrium is more likely to arise the greater the number of firms in the network. When R&D effort is endogenous, cooperative equilibria are associated with strategic complementarities between firms’ research effort, which may lead to multiple equilibria.

Antecedents of radical innovation speed from a knowledge network perspective

In the context of radical innovation, we draw from knowledge network theory to investigate how the firm can manage its alliance portfolio to speed up radical innovation that relies predominantly on scientific knowledge. Specifically, we examine how the firm's innovation alliance network composition and its position in the network affect radical innovation speed. In analyzing empirical data on COVID-19-related radical innovation projects, we find that the presence of an industry partner reduces radical innovation speed, while the presence of a research partner increases it. The presence of government partners does not influence innovation speed unless the firm has a high level of collaboration experience with the partners. As for the firm's alliance network position, a more centrally located firm experiences faster radical innovation speed. However, we find that an industry partner's presence in the project's network attenuates the positive effect of network centrality on radical innovation speed. This study contributes to the literature by linking knowledge network theory and innovation speed to identify the individual and joint effects of the firm's innovation alliance composition and its position in the network. Implications regarding accelerating radical innovation and coordinating among firms, research labs, universities, and government partners are provided.

From Digital Platform Capabilities to Firm Performance

This study aims to explore the influence mechanism of digital platform capabilities (DPC) on firm performance (FP) through a parallel mediation model of firm agility (FA) and network capabilities (NC) in a specific context. Data for this study were collected from 422 randomly selected Saudi firms with survey questionnaires mainly in central, western, and eastern areas of Saudi Arabia and then analyzed using structural equation modeling. The results showed that there are significant relationships of DPC to FA and to NC. No direct and significant relationship was found between PDC and FP. Moreover, FA and NC fully play their mediating roles between DPC and FP. The study contributes to the literature on digitalization, capabilities, and performance by providing new insights from the Saudi context. It also contributes to the practice by providing managerial implications for Saudi managers. Based on empirical evidence, to the best of authors' knowledge, this is the first endeavor to link DPC and FP and provide a new perspective of its influence mechanism.

Integration of B-to-B trade network models of structural evolution and monetary flows reproducing all major empirical laws

We develop a single two-layered model framework that captures and replicates both the statistical properties of the network as well as those of the intrinsic quantities of the agents. Our model framework consists of two distinct yet connected elements that were previously only studied in isolation, namely methods related to temporal network structures and those associated with money transport flows. Within this context, the network structure emerges from the first layer and its topological structure is transferred to the second layer associated with the money transactions. In this manner, we can explain how the micro-level dynamics of the agents within the network lead to the exogenous manifestation of the aggregated system statistical data en-wrapping the very same agents within the system. This is done by capturing the essential dynamics of collective motion in complex networks that enable the simultaneous emergence of tent-shaped distributions in growth rates within the agents, together with the emergence of scaling properties within the network in the study. We can validate the model framework and dynamics by applying these to the context of the real-world inter-firm trading network of firms in Japan and comparing the results of the statistical distributions at both network and agent levels in a temporal manner. In particular, we compare our results to the fundamental quantities supporting the seven empirical laws observed in data: the degree distribution, the mean degree growth rate over time, the age distribution of the firms, the preferential attachment, the sales distribution in steady states, their growth rates, their scaling relations generated by the model. We find these results to be nearly identical to the real-world data. The framework has the potential to be transformed into a forecasting tool to support decision-makers on financial and prudential policies.

Effect and mechanism of freezing on the quality and structure of soymilk gel induced by different salt ions.

The increasing attention toward frozen soy-based foods has sparked interest. Variations exist in the quality and structure of soymilk gels induced by different salt ions, leading to diverse changes post-freezing. This study compared and analyzed the effects of calcium chloride (CC), magnesium chloride (MC) and calcium sulfate (CS) on the quality characteristics and protein structure changes of soymilk gels (CC-S, MC-S and CS-S) before and after freezing, and clarified the mechanisms of freezing on soymilk gel. The formation rate of soymilk gel is influenced by the type of salt ions. In comparison to CS and MC, soymilk gel induced by CC exhibited the fastest formation rate, highest gel hardness, lowest moisture content, and smaller gel pores. However, freezing treatment deteriorated the quality of soymilk gel induced by different salt ions, leading to a decline in textural properties (hardness and chewiness). Among these, the textual state of CC-induced soymilk gel remained optimal, exhibiting the least apparent damage and minimal cooking loss. Freezing treatments prompt a transition of soymilk gel secondary structure from β-turns to β-sheets, disrupting the protein's tertiary structure. Furthermore, freezing treatments also fostered the crosslinking between soymilk gel protein, increasing the content of disulfide bonds. The quality of frozen soymilk gel is influenced by the rate of gel formation induced by salt ions. After freezing, soymilk gel with faster gelation rates exhibited a greater tendency for the transformation of protein-water interactions into protein-protein interactions. They showed a higher degree of disulfide bond formation, resulting in a more tightly knit and firm frozen gel network structure with denser and more uniformly distributed pores. © 2024 Society of Chemical Industry.

Assessing financial distress of SMEs through event propagation: An adaptive interpretable graph contrastive learning model

Accurate assessment of financial distress of SMEs is critical as it has strong implications for various stakeholders to understand the firm's financial health. Recent studies start to leverage network data and suggest the effect of event propagation for predicting financial distress. Yet such methods face methodological challenges in determining and explaining event propagation due to heterogeneous entities and events. In this research, we propose to extend graph contrastive learning and interpretable machine learning in the context of a firm network formed by distinct entities (e.g., firms and persons) and events (i.e., positive and negative), and employ the propagation influence of events in firm networks for financial distress assessment of SMEs. To this end, we design a novel artifact, i.e., adaptive interpretable heterogeneous graph contrastive learning, by drawing on homophily and social learning theories. Our experimental results demonstrate the effectiveness of the proposed artifacts and suggest the differing effects of positive vs. negative events on the financial distress of SMEs. This research contributes to the IS and explainable graph AI literature by improving the assessment and interpretability of network-based financial distress of SMEs.

Typewriting architects: projects and research from the AUA studio and the role of Manfredo Tafuri

This paper considers the formative years of Manfredo Tafuri in Rome, first as a member of the student group ASeA, then as a founder of the AUA studio. Rome at that time was a place of dense debate. Discussions were conducted mostly outside the retrograde School of Architecture but in the context of the network of associations and professional firms in the area. In this fervid cultural climate, Tafuri emerged first as both a designer and scholar, then as an extraordinary architectural critic, until in 1964, he decided to abandon designing altogether and dedicate himself entirely to history. Manfredo Tafuri’s Roman years have been analysed through his writings and projects carried out as a member of research groups — along with the accounts of some of his colleagues and traveling companions. The aim is to delve into the organisation of the AUA office, Tafuri’s role within it, and the reasons for his ultimate refusal to practice architecture.

Conductivity enhancement of Ag nanowire ink by decorating in situ formed Ag particles under low-temperature sintering

Silver nanowires (AgNWs) have attractive applications in the fabrication of flexible electronics because of their adequate electrical conductivity, mechanical properties, and oxidation resistance. However, the film produced by AgNW ink needs to be sintered at temperatures above 200 °C to obtain high electrical conductivity, which is incompatible with commonly used flexible substrates such as paper or polymer materials. In this study, the AgNW network was decorated by in situ reduced Ag particles (AgPs) to improve the structural integrity and conductivity of the film. After sintering at 80 °C, the pores and voids within the AgNW network were filled with Ag particles smaller than 200 nm, and the porosity of the film was markedly reduced. The lowest resistivity value was 3.9 × 10–5 Ω cm after sintering at 100 °C, only 10.8% and 8.5% of the resistivity values of the films produced from AgNW and ion inks, respectively. During sintering, Ag nucleated on the surface of AgNWs, and its growth and agglomeration resulted in interconnections between the AgNWs and Ag particles. Thereafter, the bridging and filling effect of the Ag particles facilitated the formation of a compact and firm network, improving the film conductivity. The line film printed from the composite ink with 10 layers exhibited a low resistivity of 7.3 × 10–7 Ω·m. Even after 5000 bending cycles, the resistivity of the line only increased by 4.47 × 10–6 Ω·cm from the initial value. The composite ink reported in this study is a promising candidate for the low-cost printing of ultralow-power-consumption wearable electronic devices.