How to Build a Network that Facilitates Firm‐level Innovation: An Integration of Structural and Managerial Perspectives

Abstract

In this paper, we examine to what extent the firm's propensity to be embedded in a network with advantageous structural attributes is driven by its capabilities for network management. Specifically, we discern network management practices on two organizational levels (relationship management (RM) and portfolio management (PM)) and explore their effects on three dimensions of local network structure (network centrality (NC), knowledge complementarity (KC), and tie strength (TS)). To test our hypotheses, we collect sociometric survey data from the largest inter-firm network in the German energy industry. The results indicate that intra-firm processes for network management indeed are key enablers of structural network advantages. Further, we demonstrate that RM and PM exert distinct effects: PM helps the firm improve NC, RM leads to increased TS, and KC results from an additive effect of the two capabilities. In all, our work contributes to theory on strategic networks by providing an integrated perspective on how network structure and network management benefit innovation performance.

Addressing Endogeneity Without Instrumental Variables: An Evaluation of the Gaussian Copula Approach for Management Research

“…Leading journals in marketing frequently publish papers that use the GC approach (e.g., Datta, Ailawadi, & van Heerde, 2017; Guitart & Stremersch, 2021). Similarly, the GC approach has seen a significant uptake in management research during the past years (e.g., Becerra & Markarian, 2021; Bhattacharya et al, 2020; Haschka & Herwartz, 2020; Reck et al, 2021). However, as with any statistical approach, its performance hinges on whether the underlying identifying assumptions are met; thus, a careful discussion of these assumptions is warranted.…”

“…Very frequently the use of IV methods is difficult or not feasible due to the lack of suitable instruments, often resulting in the use of instruments that lead to more harm than good (Murray, 2006; Semadeni et al, 2014). Management researchers thus increasingly turn to instrument-free methods, such as the GC approach, to deal with endogeneity (e.g., Becerra & Markarian, 2021; Bhattacharya et al, 2020; Reck et al, 2021). In this paper, we set out to evaluate the GC approach as an instrument-free method to address endogeneity for applied management researchers.…”

“…While the other instrument-free methods have seen only a very limited uptake in management research (e.g., Andries & Hünermund, 2020; Hasan, Taylor, & Richardson, 2021)—most likely due to their inherent complexity—the number of applications of the GC approach has recently been increasing (e.g., Becerra & Markarian, 2021; Bhattacharya, Good, Sardashti, & Peloza, 2020; Haschka & Herwartz, 2020; Reck, Fliaster, & Kolloch, 2021). This is not surprising, since the GC approach has multiple features that may make it appealing for management research: It offers researchers an alternative when suitable instruments are unavailable; it can be used as a robustness test when instruments are weak or their exogeneity is unknown; it can be applied to nonlinear models (e.g., Random Coefficient Logit with structural error from the normal distribution); and it can handle multiple endogenous regressors as well as interactions (Papies, Ebbes, & Van Heerde, 2016).…”

The Impact of Network Ties on SMEs’ Business Model Innovation and Enterprise Growth: Evidence From China

“…In response to the call of the micro foundation movement in the recent network research [64], taking SMEs as the research sample, this paper re-examines the micro foundation of enterprise networks in the digital situation: the impact of network ties on enterprise sustainability. Moreover, this paper takes business model innovation as an important innovation behavior of enterprises, and constructs the research model of "network ties-business model innovationenterprise growth", which provides new ideas and empirical evidence for breaking the black box of "structureperformance" [16]. In addition, the research results of this paper show that political ties have no impact on enterprise business model innovation, which provides a certain reference for the differentiated results of the mechanism of political ties on enterprise development [2], [9].…”

“…They pointed out that the research based on the perspective of resources and capabilities is a static perspective. Although resources and capabilities are important for enterprise development, the key that determines or affects whether enterprises can transform network connectivity into performance lies in enterprise behavior, Exploring the relationship between "structure-behavior-performance" from the perspective of behavior may be the focus of future research [15], [16]. Based on this, this study points out that business model innovation is an important innovation behavior of enterprises and the key for SMEs to obtain competitive advantage and promote enterprise growth in a dynamic environment.…”