Competitive brokerage: external resource endowment and information technology as antecedents

Abstract

Researchers have demonstrated that firms in relevant network positions exhibit better performance and innovation. However, there is a need to understand the determinants of network positioning, especially in competition networks, which had received scant attention in the literature. This study investigates the external resource endowment and firm capabilities that determine firms’ competitive brokerage positions within competition networks. A firm in a competitive brokerage position lies between competitors’ paths or disconnected competitors. Firms in competitive brokerage positions are able to access novel and diverse information and knowledge in a timelier manner, obtaining a competitive advantage. In addition, they are able to mediate competitive attacks in different competitor communities. Drawing on the resource based view, the resource dependence theory and the structural embeddedness perspective, we investigate how merger and acquisitions and strategic centrality on alliances networks influence the attainment of a competitive brokerage position. Specifically, we propose that the resources obtained from both strategic alliances and M&A, which enrich the resource endowment of the firm, influence competitive brokerage. We further study how information management capability can function as a substitute of strategic centrality and M&A to acquire a competitive brokerage position. We test our model using a novel longitudinal competitive network that extends across 13 different industries from 2009 to 2011. We use M&A, strategic alliances and information management capabilities data of 297 firms. Our results provide strong support for the external resource endowment and the substitutability between strategic centrality and information capability as influential antecedents of competitive brokerage.