General Description of Research:
This study offers a comprehensive view of the network centrality–firm performance relationship through a meta-analysis. Drawing on a data set of 1,699 effect sizes retrieved from 147 studies published during 2000–2022, the authors establish a positive association between degree, closeness, betweenness, and eigenvector measures of centrality with firm performance on average. Nevertheless, these measures show significant differences in their effectiveness across various contexts. While the associations of degree, closeness, and betweenness centralities with firm performance have diminished over time, the relationship between eigenvector centrality and performance has strengthened. Moreover, the linkage between degree centrality and overall performance is more pronounced in customer-oriented and larger markets, whereas closeness centrality demonstrates a stronger relationship with overall performance in larger markets. Also, social trust amplifies the relationships of degree, closeness, and betweenness centralities with overall performance. Furthermore, the centrality–performance linkage and the moderating effects of the contingency factors depend at least partially on the type of network (i.e., board interlock vs. alliance vs. supplier–customer) and the measure of firm performance used (i.e., innovation vs. financial outcomes). Incorporating these factors into social network analyses helps managers refine their networking strategies and enables scholars to improve the generalizability of their findings.
Research Abstract:
This meta-analysis investigates how a company's network relationships, like those with partners and suppliers, influence its success. While strong network positions generally improve performance, their impact is multifaceted. Key factors include the type of network, market dynamics (size and competition), company priorities (e.g., customer focus), and performance metrics (e.g., profits, innovation). Notably, having numerous connections proves more beneficial in larger markets and for businesses prioritizing customer relationships. Furthermore, the study underscores that the significance of specific network positions has evolved over time. These findings provide valuable insights for businesses seeking to refine their network strategies.
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