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Network Resources and Firm’s Competitive Behavior: Theory and Evidence

Track: Business Strategy

Keywords: competitive actions, social network, knowledge

Firms extend access to resources and information by collaborating with other firms. This paper explores how resource endowments accessible to a firm through its social network affect firm’s competitive behavior. We suggest that a firm’s partners’ knowledge portfolio- stock and diversity- has a positive impact on firm’s competitive actions’ volume, complexity and heterogeneity. Further, we argue that firms have different capabilities to access knowledge that allows them to initiate actions depending on the network position, mainly its centrality and access to structural holes. We find that partners’ knowledge has a positive effect on competitive action volume and complexity. We do not find partners’ knowledge to impact heterogeneity of actions. Further, we find that central firms due to experience at managing ties are better able to use their partners’ resources and initiate a higher volume of complex and heterogeneous actions. Lastly, we find that even when exposed to knowledge, such knowledge may not be easily leveraged if the firm’s partners are highly unconnected (access to structural holes) due to reduced trust among the partners and thus less information and knowledge flows though the ego network.

Author(s):

Simona Ileana Giura - simona.giura@oneonta.edu
SUNY Oneonta

T. Ravichandran - 
Rensselaer Polytechnic Institute

 

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