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Why They Connected: A Theoretical Analysis on the Cause of Interfirm Network Formation

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DOI: 10.4236/jss.2014.29039    3,320 Downloads   3,607 Views  

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.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

Zhan, Z. and Deng, X. (2014) Why They Connected: A Theoretical Analysis on the Cause of Interfirm Network Formation. Open Journal of Social Sciences, 2, 232-237. doi: 10.4236/jss.2014.29039.

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