TITLE:
Why They Connected: A Theoretical Analysis on the Cause of Interfirm Network Formation
AUTHORS:
Zhengqun Zhan, Xuejun Deng
KEYWORDS:
Why They Connected: A Theoretical Analysis on the Cause of Interfirm Network Formation
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.2 No.9,
August
27,
2014
ABSTRACT: Empirical studies have demonstrated that
the motivations which lead a firm to construct networks are diversified, and
are usually a synthetic result from different type motivations. We found that
firms construct their networks for many different reasons, including economic
factors (reducing costs, obtaining scarce resources, improving market competitiveness,
etc.), and social factors (as when a new or small-scaled firm joins a
well-established network to improve their image and acquire social recognition
or legitimacy).The construction of an interfirm network is driven firstly by resource
reliance. Secondly, economic benefits and improvement in market position
brought about by such networks have driven many firms to construct interfirm
networks. Finally, the social restraints arise mainly from the pressures
imposed by social norms.