Inter-firm Networks Research Articles

Міжфірмова інтеграція як ключовий фактор виникнення глобальних розподільчих мереж.

The challenges of modern economic environment stimulate the emergence and development of business alliances, some of which go beyond national markets and enter the global business space in the form of networks. In the sphere of distribution, global distribution networks are formed, which carry out business activities through partners from different countries, achieving common strategic goals and each of them benefiting. Based on the derived core features and principles of how distribution networks operate, this article presents the author’s own definition of their global dimension. Besides, viewing integration processes in economy as a key factor for the formation of such interfirm networks, the article systematizes the historical stages of their distribution development. An emphasis is also placed on the various forms of manifestation of these networks and the synergistic effects for the participating partners. By clarifying the specifics of global distribution networks, the paper highlights their importance as an emanation of the modern development of integration processes in global distribution.

Corporate governance and firm networks: An empirical research based on Italy

We examine problems of strategic change and innovation in Italian firms which develop cooperative relationships with other firms. The inter-firm network phenomenon has taken on such importance in Italy that, in 2009, the State issued a law (Decreto Legge 5/2009) specifically to regulate the concluding of cooperative contracts for the formation of inter-firm networks. This law offers firms that wish to keep their groups of owners separate the possibility to establish a multiplicity of inter-firm relationships through the signing of just one single contract, named “Contratto di rete”, which, in this paper, we will refer to as a “network contract”. For historical reasons, all firms in Italy, even those quoted on the stock market (Milan Stock Exchange), exhibit a high level of ownership concentration. The largest class of blockholders is that of families who are active in the family firm. As regards the size of firms that maintain cooperative relationships, data on network contracts show that 95% of the firms stipulating these contracts are small- or medium-sized enterprises (SMEs), so categorised because they have fewer than 50 employees. Through strategic alliances and collaborative relationships, Italian family firms have been able to develop business ideas that, as a consequence of the companies’ small dimensions, would have been impossible otherwise. On the basis of this premise, we considered it convenient to analyse small- or medium-sized family firms that developed relationships of cooperation regulated by network contracts in the period between 1/1/2013 and 31/12/2016. With reference to this category of firm, we analysed data on strategic change and innovation for a sample of 391 firms that accepted to be interviewed by us. Some of these firms had opened their top management teams (TMT) and/or their Boards of Directors to the participation of individuals from outside the dominant family, while others had not. The results of this research show that the firm that extends participation in the board or the Top Management Team by involving individuals from outside the dominant family, so as to gain better access to critical resources controlled by partners, creates a more favourable context for strategic change and innovation.

Endogenous dynamics of innovation networks in the German automotive industry: analysing structural network evolution using a stochastic actor-oriented approach

The generation of innovation is well known to be a social process depending on mutual interactions, aiming at accessing and exchanging knowledge in order to generate novel goods and services. Accordingly, interest in interfirm innovation networks has increased sharply over the last decade. Preceding research indicates that the structural dynamics of networks is driven both by endogenous and exogenous forces. In particular, we focus on the role of the endogenous determinants of the network evolution of interfirm networks - a category of often underestimated forces. We employ a longitudinal dataset that comprises German automotive firms' performance between 2002 and 2006 and apply a stochastic actor-oriented model (SAOM) designed to analyse both the endogenous and exogenous determinants of network change. Our results show that endogenous determinants - approximated by measures for local and global clustering - exhibit greater explanatory power than exogenous firm characteristics such as age, size, and R&D activity.

Modelling guanxi with a games network approach

Rapid economic growth in East Asia has often been attributed to cultural preconditions. In the case of China, high economic growth has been attributed to Confucian emphases on loyalty, reciprocal social obligations, and the pre-eminence of the group over the individual. These cultural attributes are said to be manifested especially in the practice of guanxi, a distinctive style of inter-firm networking based on trust and mutual obligations. We suggest that cultural explanations of guanxi networking behaviour appear to conflict with standard economic assumptions of rationality and utility maximisation. We argue that guanxi networks can be better understood if modelled on these standard economic assumptions. For this purpose we use a network games approach. We find that guanxi-type behaviour can be generated by the model, such that culture-based explanations appear unnecessary. Thus, we argue, guanxi behaviour can be explained in a way more consistent with rational agents and maximising behaviour.

ゲストエンジニア : 企業間ネットワークにおける知識移転と創出のメカニズム( 知識伝承システムの多様な次元)

ゲストエンジニア : 企業間ネットワークにおける知識移転と創出のメカニズム( 知識伝承システムの多様な次元)

Deadlock in corporate governance: Finding a common strategy for private telephone companies, 1978–1998

This paper looks at how a group of small, incumbent private telephone companies complied with the international convergence of market structures. The existing research has mainly focused on large national incumbents, assuming a transition to multinational enterprise. This development process is often associated with privatisation policies and various institutional factors. The article tests these assumptions using a case study of the network of Finnish local telephone companies. It looks at the development of an interfirm network, its perspectives on the different phases of the deregulation process, and how the network tried to regenerate itself but failed to form a unified corporate structure capable of mounting a common business strategy. The reason for this failure resembles the idea of governance inseparability: private telecom companies were committed to the objectives and form of a tried and trusted cooperation model, which no longer met the requirements of the competitive and increasingly liberalised business environment of the 1990s. This case demonstrates that the significance of both corporate governance and organisational development are, above all, related to the firm’s ability to regenerate itself.

Performance Effects of Global vs. Local Status: Evidence from Cross-Border Venture Capital

Organizational status, as a type of firm-specific advantage, is generally considered beneficial for firm performance. However, the effects of status, commonly operationalized based on network ties, have typically been studied only in a single social setting, or network. Therefore, an important gap in the intersection of economic sociology and international business is how should status be defined when a firm operates in multiple markets. In this paper, adopting the global versus local perspective of international business research in analysis of organizational status, we differentiate between status in global and local networks and compare their performance effects in foreign markets by constructing interfirm networks at both global and local levels. To further examine the performance effects of global and local status, we investigate the contingencies of these effects by focusing on the value chain position and high technology focus. We test our hypotheses using event history analysis of exit performance in cross-border VC investments between 1996 and 2016. Our results suggest that while global status does not have a direct performance effect, local status is generally beneficial for firm performance in foreign markets and is more salient at the upstream end of the value chain but less so in high-tech investments.

Human capital, firm performance and the moderating role of the interfirm network

The last three decades have witnessed a remarkable economic transition in China. Changes in the redistribution system and on-going corporate governance reform have emphasised the importance of huma...

Networking, business process innovativeness and export performance: the case of South Asian low-tech industry

PurposeThe purpose of this study is to investigate the role of business process innovativeness in the networking-export performance relationship in a developing country low-tech industry setting. Most innovation research in international business and entrepreneurship is conducted on high-tech industries in developed countries. Less research has focused on the low-tech industry context. This study bridges this research gap by testing whether international new ventures’ (INVs) networking resources impact their export performance through business process innovativeness.Design/methodology/approachThe study tests the link between low-tech INVs’ networking, business process innovativeness and export performance using a sample of 647 export start-up apparel firms in Bangladesh, the second largest apparel exporter in the world.FindingsThe results recognize that an INV entrepreneur’s personal and inter-firm networking are directly and positively related to business process innovativeness and export performance. The findings also indicate that business process innovativeness acts as a mediator only between an INV’s inter-firm networking and its export performance.Research limitations/implicationsThe study was undertaken in a Bangladeshi low-tech industry setting-the apparel sector; thus, future research may include data collection from a range of industries across countries. Data collected for the purpose of this study used a cross-sectional research design, and this may only have confirmed the relationships in the model and not causality between the constructs.Practical implicationsThe findings highlight that low-tech INVs should focus more on leveraging their personal and inter-firm networking resources, as this should result in improved export performance. The results also provide directives for INVs in regard to improving their business process innovativeness to achieve increased performance.Originality/valueThe study is not only carried out in the context of low-tech early internationalizing firms (i.e. INVs), but also contributes to theory and practice by testing whether INVs’ networking resources (personal and inter-firm) have an impact on business process innovativeness, which in turn leads to improved performance.

DEALING WITH DUAL CAREER COUPLES: A TOOL FOR ACCEPTING AND MAKING INTERNATIONAL ASSIGNMENTS EFFECTIVE

The study seeks to explore existing literature on how MNCs are dealing with dual career couples for international assignees to accept international assignment and what these MNCs have not been able to provide so that contribution can be made to the existing literature. The study was exploratory research where the contributions of various authors were assessed to determine if dual career couples pose a threat for international assignees to accept international assignment. The exploration reveals that MNCs need to deal with issues associated with dual career couples since it contribute significantly to the rejection of international assignments. There are various strategies MNCs adopt in order to entice the international assignee’s spouse to give his or her blessing to the international assignment and mainly among them captured in the literature are providing a lump sum payment for the trailing spouse, inter-firm networking, assisting the trailing spouse to find job in the host country, engaging in reciprocal arrangement with other MNCs to find job for the trailing spouse in the host country and providing career support in order to make the trailing spouse skills, knowledge and abilities relevant to the host country job market. The study identified two strategies that could be used to deal with dual career couples which were not captured in the literature and these are the active involvement of the expatriate spouses in the recruitment and selection process and the use of virtual assignments by relying on the availability of technology for international assignments.

‘Grounding’ Global Value Chains? A Geographer’s Perspective on Outsourcing Economics

William Milberg has made important contributions to scholarship on the economics of globalisation, especially in relation to matters such as income distribution and economic growth. With Outsourcing Economics, he continues to advance work in this area, teaming up with fellow economist Deborah Winkler to produce an exceedingly dense yet fundamentally important book that tackles the role of offshoring in the internationalisation of production and its impact on labour and economic development. In the field of international economics that is largely dominated by neoclassical trade theories based on the specialisation and exchange of final goods, the book thus stands out as a novel and powerful take on globalisation by placing global value chains (GVCs)—sets of inter-firm networks involved in the production of commodities—at the centre of the analysis. Empirically, the core concern is the increasing proportion of world trade occurring within GVCs. Theoretically, the assertion is that the Ricardian logic of comparative advantage can no longer comprehend this ‘new wave’ of globalisation. Growing trade in intermediate goods and the vertical disintegration of production along GVCs have undermined the validity of such economic models. Rather than a set of natural ‘market forces’ determining the volume and direction of trade between national economies, the decisions by lead firms and the power asymmetries among GVC actors are now the major elements shaping the (uneven) distribution of the gains from globalisation.

The gradual evolution of buyer\u2013seller networks and their role in aggregate fluctuations

Buyer–seller relationships among firms can be regarded as a longitudinal network in which the connectivity pattern evolves as each firm receives productivity shocks. Based on a data set describing the evolution of buyer–seller links among 55,608 firms over a decade and structural equation modeling, we find some evidence that interfirm networks evolve reflecting a firm’s local decisions to mitigate adverse effects from neighbor firms through interfirm linkage, while enjoying positive effects from them. As a result, link renewal tends to have a positive impact on the growth rates of firms. We also investigate the role of networks in aggregate fluctuations.

Networking capability in supplier relationships and its impact on product innovation and firm performance

PurposeThe purpose of this paper is to propose and empirically investigate the concept of networking capability (NC) for the management of supplier relationships and their dynamics in order to leverage product innovations. NC in the context of supplier relationships is conceptualized based on dynamic capabilities aimed at relationship initiation, relationship development, and relationship ending. Furthermore, the study tests the interaction of NC with relationship proclivity as an organizational feature, and analyzes latent classes of NC affecting product innovation.Design/methodology/approachThis study brings together prior research on company routines related to inter-firm networking, the dynamic capability approach to strategy, and literature on inter-firm innovation. The study utilizes multiple informant survey data gathered from 156 firms operating in the automotive parts industry in Iran. Data are analyzed with partial least square structural equation modeling, as well as latent class analysis using finite mixture modeling (FIMIX-PLS).FindingsThis research provides evidence for the positive influence of NC with respect to supplier relationships on firm product innovation, as well as overall firm performance. Relationship proclivity is shown to amplify this effect. At the same time, the research illustrates that NC may be applied in different combinations in the context of supplier relationship portfolio management. Two mechanisms are tentatively identified: firms using “static optimization” focus mainly on supplier relationship development capabilities, while those using “dynamic optimization” utilize supplier relationship initiation and ending capabilities.Research limitations/implicationsThis research focuses on one setting (i.e. the automotive parts industry in Iran). Further studies need to broaden these findings to other industries and countries, specifically those which show a different cultural make-up from Iran. Furthermore, this research indicates the existence of two distinct mechanisms as to how different aspects of NC impact product innovation. While it is reasonable to identify these mechanisms as networking “strategies,” this study does not clarify whether this represents intended strategies by firms or relates to emerging capability patterns.Practical implicationsThe study contributes to managerial knowledge by illustrating the need for a dynamic approach with regard to networking-related routines in supplier relationships in the context of product innovation. This study suggests that managers should devote equal attention to strengthening existing supplier relationships as well as to initiating new supplier relationships (e.g. screening for promising partners and signaling firm’s relationship value to attract new counterparts) and managing non-performing supplier relationships (e.g. by developing routines to exit from those supplier relationships).Originality/valueThe paper contributes to a better understanding of dynamic approaches to networking with suppliers and their impact on product innovation from the perspective of the focal firm. It furthermore provides a fine-grained understanding of different latent classes of firms in terms of how they utilize networking capabilities.

Property rights and the formation of interfirm networks: a network analysis of the interlocking directorates in China\u2019s listed companies

Interfirm networks are one of the core modes of corporate governance. However, its formation mechanism is not clearly and adequately delineated. This article highlights the significance of property rights to the formation mechanism of interfirm networks. Using interlocking directorate data from Chinese listed companies during the years 2000–2010, we investigate the association between ownership and network formation, at both the individual attribute level and dyadic level. Results show that companies owned or controlled by the state are more likely to form interlocking networks, and these relations tend to emerge among companies that have identical ownership. The higher the administrative level to which state-controlled companies are affiliated, the more likely they are to form interlocking networks. Theories of economic efficiency also have some explanatory power regarding network formation.

Internationalization of South African Retail Firms in Selected African Countries

ABSTRACTAfrican markets are complex environments for foreign multinationals. The continent, which has recently attracted significant attention for its rich potential and growth prospects, presents a multitude of challenges for the South African retailers leading the charge of retail expansion. This qualitative study seeks a deeper understanding of the contextual challenges experienced by these firms in other African markets, and how they have managed this process. It further engages how these firms build networks with local stakeholders and how they overcome information deficits. This study confirms the rich variety of capabilities and approaches developed by South African retailers operating across the continent, as opposed to a single standard approach. The research has further confirmed that these firms typically use SA Inc. as a country specific advantage in their expansion, leveraging off their inter-firm networks and personal exchanges to gain a better understanding of African markets and their consumers.

Firm network structure and innovation

This study examines how various dimensions of a firm's network affect innovation and pricing of innovation by market participants. We use board interlocks to build interfirm network and construct different network measures to capture firm centrality in the interfirm network, cohesion within firm network, and diversity, innovativeness, and propinquity of firm network. Our results show that these different characteristics of network connectedness affect firm innovation input and output, particularly for firms in relatively intangible industries. These results are robust to the use of an instrumental variables approach as well as a natural experiment of state-level changes in R&D tax credits. We also find that innovation has a positive (negative) marginal effect on corporate bond yield spreads when firms have lower (higher) connectedness, suggesting that the market perceives innovative activities by more connected firms as less uncertain. Yield spread changes around patent filings further support this finding.

Within-Seller and BuyerrSeller Network Structures and Key Account Profitability

In business-to-business (B2B) markets, the success of key account management (KAM) teams depends heavily on how they are structured and how they handle the relationship with customer accounts. The authors conceptualize the relationships among selling team members as a within seller (intrafirm) network, and the relationships between selling team members and buyer representatives as a buyer-seller (interfirm) network. Drawing on the motivation–ability framework, the authors examines how the interplay between these two networks drives seller account profitability. The authors argue that buyer–seller tie density and within-seller tie density can be conceptualized as motivation, whereas buyer-seller similar-function ties, within seller cross-function ties, and within seller centralization can be conceptualized as ability in this context. Using field data from 207 key account managers from a variety of B2B industries, in a regression model that corrects for unobserved heterogeneity and endogeneity, the authors find a negative interactive effect of motivation factors and a positive interactive effect of ability factors on seller account profitability. These findings suggest that motivation factors serve as substitutes, whereas ability factors serve as complements, across the two KAM networks. The findings also suggest that aligning the motivation and ability aspects of buyer–seller and within-seller firm KAM networks can improve account profitability by up to 4%.

Integrated Business Prestige and Artificial Intelligence for Corporate Decision Making in Dynamic Environments

ABSTRACTA precise measure of corporates’ operating performance plays a critical role in it achieving sustainable development during turbulent financial markets, because bad operating performance has been widely recognized as the main cause of financial crises. Thus, this study introduces an innovative approach to estimate a corporate’s risk (profit) utilizing the variance of the performance function derived from hybridized random projection (RP) and data envelopment analysis (DEA). Furthermore, this study considers firms citation from large number of business news, establish an interfirm network from the firm citation by social network technique and implement to determine the firm’s position embedded in the network that can be viewed as its competitive edge. Finally, this study incorporates industrial position with artificial intelligence (AI)-based techniques to construct the forecasting mechanism for managers to assess their firm's performance ranking. Empirical results reveal that the introduced model is a promising alternative for corporate risk management.

Information technology-enabled interactions, mutual monitoring, and supplier-buyer cooperation: A network perspective

This study, which integrates the literature on IT (information technology)-enabled interactions and governance mechanisms in interfirm relationships, proposes facilitated access to a network of partners as a key feature that distinguishes IT-enabled interactions from those that occur offline. Specifically, IT-enabled interactions improve interfirm network embeddedness, which in turn improves firms' perceived ability to mutually monitor each other. In contrast to the unilateral monitoring prevalent in prior research, the network-induced mutual monitoring, which reduces information asymmetry and improves power equity, improves cooperation performance without the backfiring “reactance” effect. Moreover, this study offers conceptual distinctions between formal and informal IT-enabled interactions and their different roles in supplier-buyer cooperation. A sample of 240 manufacturing firms in China contributes to this research, and the results strongly support the hypotheses. Overall, this study provides a better understanding of the role of IT-enabled interactions in supplier-buyer cooperation.

An Analysis of the Contribution of Japanese Business Terms to Corporate Sustainability: Learnings from the “Looking-Glass” of the East

During the last decade, there has been increasing research on Corporate Sustainability, whereby most of such research was undertaken in the Western world. This paper is aimed at analysing the contribution of Japanese Business terms to Corporate Sustainability. The paper analyses, using Grounded Theory, 28 Japanese business terms through a Corporate Sustainability framework based on the four dimensions of sustainability (economic, environmental, social, and time), the company system (operations and processes, strategy and management, organisational systems, procurement and marketing, and assessment and communication), and stakeholders (internal, interconnecting, and external). The underpinning principles of the Japanese business terms provide complementary approaches to Western views on corporate sustainability by offering a more holistic perspective by linking the company system and its stakeholders to the four dimensions of sustainability. The paper proposes that Corporate Sustainability can learn from Japanese business approaches through: (1) the interaction and alignment of the factory, the firm, and inter-firm network; (2) the relationships between management and employees; (3) the inter-linkages between the company system elements; and (4) how Japanese companies remained competitive, even under the stress of a long-term major economic crisis. However, the analysis indicates that the relationship with external stakeholders and communicating with them through assessment and reporting is lacking in Japanese business management practice. Japanese businesses and their management can also learn from the Corporate Sustainability of the West by: (1) considering the four dimensions of sustainability and how they interact; (2) taking a holistic and systemic approach to Corporate Sustainability; (3) engaging in more Corporate Sustainability research; and (4) making Corporate Sustainability part of a company’s culture and activities. Businesses in the East and the West need to recognise that they can both contribute to making the world more sustainable by learning from each other’s approaches on Corporate Sustainability and adapting them to their own contexts.