Where Can Capabilities Come From? How the Content of Network Ties Affects Capability Acquisition
AbstractWhile strategy researchers have devoted considerable attention to the role of firm-specific capabilities in the pursuit of competitive advantage, less attention has been directed at how firms obtain these capabilities from outside a firm's boundaries. This study analyzes how firms' network ties represent one important source of capability acquisition. Theoretically, we go beyond the traditional focus on network structure and offer a novel contingency model that specifies how differences in the content of network ties (e.g., buyer-supplier, equity, and director ties) will differentially affect the process of R&D capability acquisition. Empirically, we also seek to provide an original contribution to the capabilities literature by utilizing a stochastic frontier estimation to rigorously measure firm capabilities, and we demonstrate the value of this approach using longitudinal data on business groups in emerging economies. The supportive results of our analysis show that the effect of network ties on the acquisition of new affiliate capabilities is clearly and predictably contingent on the content of the ties.
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Bibliographic InfoPaper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2008-14.
Length: 37 p.
Date of creation: Apr 2008
Date of revision:
Note: An earlier version of this paper was presented at the 2006 National Academy of Management meetings, Atlanta.
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-17 (All new papers)
- NEP-CSE-2008-05-17 (Economics of Strategic Management)
- NEP-IPR-2008-05-17 (Intellectual Property Rights)
- NEP-MIC-2008-05-17 (Microeconomics)
- NEP-NET-2008-05-17 (Network Economics)
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- Randall Morck & Bernard Yeung, 2003. "Family Control and the Rent-Seeking Society," William Davidson Institute Working Papers Series 585, William Davidson Institute at the University of Michigan.
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