Asymmetric roles of business ties and political ties in product innovation

This study investigates the asymmetric roles of business ties and political ties in innovation processes. The study posits that business ties strengthen organizational competence and enhance the environmental fit. In contrast, political ties increase the environmental fit but ossify organizational internal routines. The study uses an extensive survey on 766 Chinese firms across multiple sectors to test hypotheses. The empirical results provide strong supports for hypotheses by showing that: (1) business ties have a positive impact on product innovation, indicating that despite different types of business ties, they share common features in enhancing product innovation; (2) political ties have an inverted U-shaped relationship with product innovation, indicating that the positive effect of political ties on product innovation would diminish as the costs of political ties outweigh the benefits.     

Beyond close vs. distant ties: Understanding post-service sharing of information with close,exchange, and hybrid ties

Customers' post-service sharing of information (PSSI) occurs with a range of social ties typically conceptualized in terms of closeness/tie strength. We extend this research by orthogonally crossing the dimension of closeness with exchange to define close, exchange, and hybrid ties. Study 1, a survey of actual PSSI behavior, supports our conceptualization regarding the dimensions of closeness and exchange defining audiences for PSSI. Study 2, a survey of PSSI intentions, further supports the significance of this extended conceptualization by showing that a model with close, exchange, and hybrid ties has a significantly better fit than a model with only close ties. We provide further evidence of the significance of these three ties by showing that service outcome and process have distinct effects on PSSI to each social tie. Satisfaction has a non-linear effect on PSSI to close ties, and positive and negative linear effects on exchange and hybrid ties respectively. Further, satisfaction is the sole predictor of PSSI to close ties, whereas satisfaction, provider status and customer power interactively drive PSSI to exchange and hybrid ties. Thus, considering close, exchange, and hybrid ties enables a more comprehensive understanding of PSSI.     

Social ties between SME managers and bank employees: Financial consequences vs. SME managers' perceptions

We investigate whether social ties between SME managers and bank employees affect SME access to lending, investment, growth and profitability. On the one hand, we examine the influence of social ties on financial indicators based on SME financial statements; on the other hand, we study the impact of social ties on SME managers' perceptions of their firms' main banks. Using a dataset from Poland, we find that social ties improve SMEs' access to bank financing and stimulate their investments. However, this positive impact occurs only when social ties involve bank decision-makers. In contrast, SME managers perceive all types of social ties with bank workers as valuable.     

The Influence of Business Ties and National Culture on Foreign-Subsidiary Capability Building in an Emerging Market

This study investigates the effects of formal and informal business ties on foreign-subsidiary capability-building activities. Data from 175 foreign subsidiaries in the Philippines shows that formal business ties are negatively related to capability building, whereas informal business ties are positively related to capability building. The authors also find that foreign-subsidiary home country assertiveness positively affects the positive relationship between informal business ties and capability building. These results indicate that in an emerging market, foreign-subsidiary capability building varies by the type of business ties being employed by a foreign subsidiary and that home-country assertiveness influences these outcomes.     

The moderating role of managerial ties in market orientation and innovation: An Asian perspective

This empirical study contributes to the extant literature by investigating the relations among market orientation, managerial ties and innovation simultaneously and interactively, from an Asian perspective. Our findings reveal that customer orientation and interfunctional coordination have a positive impact on innovation. Moreover, managerial ties play a moderation role in the market orientation–innovation linkage. Business ties enhance the relation between customer orientation and interfunctional coordination and innovation. On the other hand, business ties and competitor orientation have a negative interaction effect on innovation. In addition, political ties also dampen the relation between interfunctional coordination and innovation. Such results add new insights to the extant literature and provide implications for future research and marketing practices in Asia.     

To Help or Not to Help: Understanding the Helping Intentions from a Mediating Perspective of Social Network Ties

This study assesses the relationships among helping intentions and their exogenous antecedents by considering social network ties as mediators. In the model the need for power–prestige, outcome interdependence, and person–organization fit all indirectly influence the helping intentions through the mediation of social network ties comprised of instrumental ties and expressive ties. The model is tested by applying data from employees of different companies, who attend an evening college for advance study. The test results reveal that helping intentions are influenced significantly by expressive ties and instrumental ties, while the influences of outcome interdependence and person–organization fit on expressive ties and instrumental ties are both respectively significant. Finally, the influences of the need for power–prestige on expressive ties and on instrumental ties are insignificant. Implications of the empirical findings are also discussed herein.     

Ethno-national ties and international business opportunity exploitation: The role of environmental factors

This paper examines the effect of ethnic populations on international opportunity exploitation at a societal, or national, level. Past research shows a relationship between ethnic ties and international opportunity at an individual level; however, little is known about the role of ethnic ties and international opportunity at a national level, which is called ‘ethno-national ties’ in this study. In order to acquire in-depth knowledge of this subject, we studied a population of Chinese who are living outside their home country and applied contingency theory principles to investigate environmental boundary conditions that affect this population. Data collected from Chinese exporters indicate an overall positive effect of ethno-national ties on international opportunity exploitation—an effect that is influenced by three moderating variables: technological turbulence, psychic distance, and export barriers. Technological turbulence and export barriers weaken the effect of ethno-national ties on international opportunity exploitation while psychic distance enhances the effect.     

Network Characteristics and Firm Performance: An Examination of the Relationships in the Context of a Cluster

The study examined the impact of spatial relationships on firm performance. It also assessed the impacts of network structural and relational characteristics on performance, as well as the moderating effects of these variables on the spatial relationship to performance linkages. The sample comprised 252 firms located in a mold industry cluster in the Zhejiang province of China. Both in‐cluster ties and extra‐cluster ties positively impacted performance. However, the effects of distant ties were more pronounced. Tie stability had a positive effect whereas tie quality had a negative effect on performance. Network centrality, tie strength, and tie stability strengthened the relationship between in‐cluster ties and performance. By contrast, all network tie characteristics weakened and changed the form of the relationship between extra‐cluster ties and performance. The findings suggest the need for cluster firms to consciously cultivate distant linkages in their network ties in order to neutralize the tendencies for lock‐in and to arrest entropic deterioration in their respective clusters.     

Enhancing or inhibiting: The impact of investment in political ties on the link between firm innovation and productivity

Whether investment in political ties enhances or inhibits firm innovation has not been well understood in the literature. Theoretically, proactive use of political ties could help firms gain favourable political resources, thereby enhancing the effectiveness and efficiency of firm innovation activities. However, investment in political ties might conflict with innovation in internal resource orchestration processes. Based on a sample of 9693 firms across 27 transition economies, I find that the effect of investment in political ties on the link between innovation and productivity is based on type of innovation and type of political investments. Although bribery does not show any significant influence on the link between either product or organizational innovation and firm productivity, managerial time invested in political ties weakens the positive relationship between organizational innovation and productivity.     

Ethnic ties, location choice, and firm performance in foreign direct investment: A study of Taiwanese business groups FDI in China

This paper examines ethnic ties and their impact on FDI location choice and firm performance. Drawing on social network theory and using data from 88 Taiwanese business groups, the study tests the impact of ethnic ties on firm FDI location choice and performance outcomes in China. Results show that ethnic ties of top managers matter in facilitating firm FDI location choice. In contrast to our expectations however, ethnic ties do not help to improve firm performance in China. Implications of these results are discussed in view of existing literature and future research opportunities are delineated.     

Economic geography and emerging market clusters: A co-evolutionary study of local and non-local networks in Bangalore

The presence of network ties within location plays a significant role in organization and evolution of clusters. This has proven to be particularly true for clusters specializing in knowledge intensive industries, where the organization of resources – people and technology – has been a primary driver for firm and regional performance. With the help of a longitudinal case study of the Bangalore IT cluster in India, we investigate the effect of local and non-local network ties on its evolution. We argue that networks – both local and non-local – play an important role in the development of cluster. We propose a non-linear relationship between cluster evolution phases and the type of network ties most prominent. Our study also outlines the role that embedding, expansion, and extension of ties plays in transitioning cluster from one phase to the other. The consideration of non-local ties is rather nascent in the cluster literature and promises to enhance the understanding of how clusters develop at both levels – policy as well as firm.     

Bonding Ties,Bridging Ties,and Firm Performance: The Moderating Role of Dynamic Capabilities in Networks

ABSTRACT

Purpose: Building on the dynamic capabilities view and the configuration of network ties, this study investigates how dynamic capabilities moderate the relationships between bonding and bridging ties and firm performance, thus an area with potential to explain the divergent empirical results contained in the existing literature on the relationship between intra/extraorganizational ties and performance.

Methodology: This study employed a mail survey to senior executives. A total of 169 firms operating in an industrial district were collected. Regression analysis was employed to test the proposed model.

Findings: This study found that the combination of dynamic capabilities and bonding/bridging ties helps improve firm performance. Furthermore, this study found a positive relationship between bonding ties and firm performance, but no equivalent relationship for bridging ties.

Research Implications: Research results indicate that firm performance is significantly enhanced by bonding ties, which provide opportunities for sharing information and exchanging resources. Moreover, the empirical results reaffirm the proposition that dynamic capabilities are important transformational mechanisms for managing resources.

Practical Implications: The findings reveal that managers can improve firm performance by simultaneously building social ties and developing and implementing dynamic capabilities.

Originality/Value: This study demonstrates that the components of dynamic capabilities (i.e., sensemaking and reconfiguration) are transformational mechanisms and can moderate the positive relationship between bonding and bridging ties and firm performance, empirically supporting recent perspectives from the literature on dynamic capabilities and social networks.     

Gender,Social Networks,and Entrepreneurial Outcomes in Tanzania

This article presents results of a study that investigates egocentric network differences between female and male entrepreneurs and their entrepreneurial outcomes in Tanzania. Based on a random sample of 272 micro-, small, and medium-size enterprises, the study reveals that female and male entrepreneurs have diverse networks. However, when compared to their male counterparts, female entrepreneurs' strong ties included more kin members. No significant gender difference in the composition of weaker ties was observed, suggesting gender differences in the choice of individuals with whom to have strong ties but not with whom to have weak ties. A significant gender difference in entrepreneurial outcomes at both start up and at the time of research was found, suggesting an antecedent networking behavior influence on performance.     

Top management team’s formal network and international expansion of Chinese firms: The moderating role of state ownership and political ties

This article explores the role of the formal network centrality of top management teams (TMT) for foreign expansion, looking at the case of Chinese firms. The former is defined by the degree to which top managers are connected with TMTs of other firms in formal ways, through service as independent board members. We explore boundary conditions, comparing state ownership with political ties. The analysis of a panel data of 489 firms expanding to 72 developed and developing host markets in the period 2000–2012 confirms that network centrality facilitates internationalization. We found that TMT network centrality had a stronger effect on internationalization in developed than emerging markets. Conversely, state ownership had a positive moderating effect in the latter and political ties a negative effect in developed ones. The literature on comparative institutional analysis suggests that formal ties are more important in developed economies, and informal ties in emerging ones. However, formal political ties and/or links to the Chinese state may be more of value in internationalizing into other emerging markets, where the balance of diplomatic power may be more skewed in China’s favor.     

How habits, social ties, and economic switching barriers affect customer loyalty in contractual service settings

While existing literature acknowledges positive effects of satisfaction and economic switching barriers for building customer loyalty, studies analyzing interactions of these antecedents reveal mixed findings. Prior research does not consider, as antecedents of switching barriers, either habits or social ties that result from shared service-usage within a family or community. This paper contributes to the literature, first, by replicating the effects of satisfaction, economic switching barriers, and their interaction with customer loyalty and word-of-mouth of subscribers to a contractual service. Second, the study empirically tests the role of social ties as a social switching barrier. Third, the study introduces and tests the effects of habits as a precursor of economic and social switching barriers. Results reveal significant positive effects of satisfaction, economic switching barriers, and social ties on customer loyalty and word-of-mouth. Additionally, economic switching barriers and social ties interact significantly with satisfaction and habits act as a precursor of economic switching barriers and social ties.     

Corporate Entrepreneurship, Informal Ties, and Firm Performance: Evidence from China

How can a firm achieve superior performance through corporate entrepreneurship in a transition economy? To address this question, we draw upon the resource-based view and the institutional theory to explore distinct roles of business ties and political ties in fulfilling resource needs confronted by different corporate entrepreneurial activities (i.e., internal innovation, venturing and strategic renewal). Using data of 228 firms from the Pearl River Delta area in China, our empirical findings reveal that corporate entrepreneurial activities do not always positively lead to performance in transition economies. Furthermore, the possession of high levels of business ties is more beneficial to the success of internal innovation and strategic renewal, while the possession of high levels of political ties contributes more to the success of venturing.     

高层管理者关系对创业导向的影响机制研究——一个有中介的调节模型

创业导向是企业价值增值,实现增长的战略选择.本文以机会获取为中介变量,以环境不确定性为调节变量,构建了一个有中介的调节效应模型,旨在揭示高层管理者关系对企业创业导向的影响机制.基于210家成熟企业数据的实证研究结果表明:高层管理者商业关系、政治关系对企业创业导向有正向影响,机会获取在高层管理者商业关系、政治关系与创业导向间发挥完全中介作用;环境不确定性削弱了高层管理者商业关系、政治关系对企业机会获取的直接效应,从而弱化了其对创业导向的间接效应.     

How foreign firms achieve competitive advantage in the Chinese emerging economy: Managerial ties and market orientation

As China experience unprecedented changes in its social, legal, and economic institutions, on what should foreign firms focus more to overcome this challenge, managerial ties or market orientation? This study investigates how managerial ties and market orientation affect competitive advantage and, consequently, firm performance in China. On the basis of a survey of 179 foreign firms in China, we find that both managerial ties and market orientation can lead to firm success—but in different ways. Market orientation enhances firm performance by providing differentiation and cost advantages, whereas managerial ties improve performance through an institutional advantage (i.e., superiority in securing scarce resources and institutional support). Institutional advantage, in turn, leads to differentiation and cost advantages and consequently superior performance.     

The interface of market and nonmarket strategies: Political ties and strategic competitive actions

We focus on corporate political connections as a critical nonmarket strategy and propose that political ties can facilitate firms’ strategic competitive actions but may also hurt the outcomes of such actions, depending on whether the ties are associated to central versus local political actors. Studying China's television manufacturers at the onset of deregulation and globalization, we find that central and local political ties have contrasting effects on firms’ competitive actions and their performance outcomes. To further shed light on theoretical mechanisms, we examine the impact of China's WTO accession on firm actions and contrast domestic-based and internationalization competitive actions.     

When political instability devaluates home-host ties

This study aims to shed light on how the value of home-host ties is contingent on political instability (i.e., political conflict and major institutional transitions). We hypothesize that by increasing the risk within the institutional structure, small political conflict positively moderates the relationship between home-host ties and location attractiveness, whereas full-fledged wars, in which risk to the institutional structure dominates erode the value of ties. Examining location choice decisions in Sub-Saharan Africa, we find evidence that home-host ties are not affected by small political conflict, while wars and major institutional transitions devaluate home-host ties.