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Social network analysis in international business research: An assessment of the current state of play and future research directions


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The theory of networks has attracted increasing attention in international business (IB) research. However, despite its growing theoretical utilization, the systematic description, modelling and analysis of network relationships has been scarce in IB. The field has taken a stand in favour of conventional methodological approaches, which hinders the close interaction between theoretical development and empirical reality in network-based IB research. This study seeks to contribute to IB research by incorporating social network analysis (SNA) as an innovative and promising research tool and aims to shed light on the richness of SNA in fostering IB research, through adding more nuanced network understanding. In particular, it calls attention to its potential applications through exemplifying around two fundamental IB phenomena: firm internationalization and multinational enterprises (MNEs). It concludes by suggesting future directions for utilising SNA in the IB field.
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Social network analysis in international business research:
An assessment of the current state of play and future
research directions
Yusuf Kurt Mustafa Kurt
This is an Author’s Original Manuscript (AAM) of an article published by
Elsevier in International Business Review. Please cite the published
Kurt, Yusuf and Mustafa Kurt (2020) "Social network analysis in international business research:
An assessment of the current state of play and future research directions" International
Business Review
The theory of networks has attracted increasing attention in international business (IB)
research. However, despite its growing theoretical utilization, the systematic description,
modelling and analysis of network relationships has been scarce in IB. The field has taken a
stand in favour of conventional methodological approaches, which hinders the close
interaction between theoretical development and empirical reality in network-based IB
research. This study seeks to contribute to this body research by incorporating social network
analysis (SNA) as an innovative and promising research tool and aims to shed light on the
richness of SNA in fostering IB research, through adding more nuanced network
understanding. In particular, it calls attention to its potential applications through
exemplifying around two fundamental IB phenomena: firm internationalization and
multinational enterprises (MNEs). It concludes by suggesting future directions for utilising
SNA in the IB field.
Key Words
Social network analysis; business networks; internationalization; multinational enterprises;
network structure; structural holes; network closure
We gratefully acknowledge the comments and recommendations received from S. Tamer
Cavusgil, Rudolf R. Sinkovics, Mo Yamin, and Steven Yen-Hung Liu at the different stages
of article development. We also thank the IBR editor and two anonymous reviewers.
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Social network analysis in international business
research: An assessment of the current state of play
and future research directions
The theory of networks has attracted increasing attention in international business (IB) research.
However, despite its growing theoretical utilization, the systematic description, modelling and
analysis of network relationships has been scarce in IB. The field has taken a stand in favour of
conventional methodological approaches, which hinders the close interaction between theoretical
development and empirical reality in network-based IB research. This study seeks to contribute to
IB research by incorporating social network analysis (SNA) as an innovative and promising
research tool and aims to shed light on the richness of SNA in fostering IB research, through
adding more nuanced network understanding. In particular, it calls attention to its potential
applications through exemplifying around two fundamental IB phenomena: firm
internationalization and multinational enterprises (MNEs). It concludes by suggesting future
directions for utilising SNA in the IB field.
Keywords: Social network analysis; business networks; internationalization; multinational
enterprises; network structure; structural holes; network closure.
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1. Introduction
Parkhe, Wasserman, and Ralston (2006, p. 560) note that networks are reshaping the global
business architecture’, an idea that is also applicable to current international business (IB)
research. The network view has reshaped conventional theoretical understandings by elevating
research focus, from being firm-centric towards a more relational, contextual and systemic level
(cf. Forsgren and Johanson, 2014). Network thinking has been intensively integrated into various
IB phenomena, including internationalization (Coviello, 2006; Johanson and Vahlne, 2009;
Yamin and Kurt, 2018), multinational enterprises (Buckley, 2011; Dhanaraj, 2007; Ghoshal and
Bartlett, 1990), and foreign direct investment (Chen and Chen, 1998; Jean, Tan, and Sinkovics,
2011), to name a few.
However, despite its growing theoretical utilization, the systematic and empiric analysis
of networks has been scarce in IB (Yamin and Kurt, 2018). The field conceptualizes markets as
systems of networks and acknowledges that international business activities take place within the
context of network relationships (e.g. Forsgren and Johanson, 2014; Johanson and Vahlne, 2009,
2011). Nonetheless, the network view in IB research has been predominantly generic and
metaphorical, as structural and positional attributes of networks have not been effectively
integrated into empirical analyses. For instance, networks are mostly considered as general webs
of relationships, in which network outcomes are assumed to be evenly distributed among the
members. However, the structural attributes and configuration of a network in which a focal actor
is embedded define the level and type of network outcomes available to the actor. Hence, this
approach implies a static network view that treats actors as passive agents and overlooks their
conscious and deliberate actions in attempting to create network configurations that benefit them
(Ahuja, Soda, and Zaheer, 2012).
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Furthermore, despite the field’s increasing recognition of the importance of context in
determining opportunities for or constraints on actors (e.g. Michailova, 2011), the influence of
structural patterns of social context on actor-level outcomes has not been sufficiently established.
This is mainly because context has been treated as homogenous and focus has been largely on
actors rather than the patterns of interaction and interdependence among them. Hence, the field’s
efforts at understanding contexts are likely to be incomplete and potentially flawed without
appreciation of the underlying structural patterns of social context (Ahuja, et al., 2012, p. 434).
Therefore, for IB scholarship to progress, analytical tools are needed in the analysis of network
regularities within social structures, revealing the interdependence of IB activities and actor
behaviours and thus developing a more nuanced understanding of networks. This need was
identified by IB scholars, who pointed out that social networks need to be investigated with
appropriate methodologies (Zucchella, Palamara, and Denicolai, 2007, p. 277).
One such methodology is social network analysis (SNA), which refers to a set of
analytical tools for mapping and measuring relationships among social entities, such as
individuals, organizations or any social units (Cross, Parker, and Sasson, 2003; Wasserman and
Faust, 1994). SNA’s essential premise is that the social world and actors within it are created and
shaped primarily by relationships and patterns formed by these relationships (Marin and
Wellman, 2011). Hence, it takes a fundamentally different perspective from individualist and
attribute-based methodologies in explaining actor behaviours and substantive outcomes. It sees
the social world in terms of interactions, rather than in an aggregation of actors who act
independently, and thus focuses on patterns of relationships as the unit of analysis (Marin and
Wellman, 2011).
From an SNA perspective, a notable shortcoming of network-based IB research is its
effort to understand actor behaviours and substantive outcomes by employing conventional
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individualist methods, which hinders the compatibility of theoretical development with empirical
reality. This incompatibility is primarily associated with the underlying assumption of the
independence of conventional statistical methods, which explain the attributes of an entity as a
function of other attributes of that same entity (Borgatti and Li, 2009). While IB research
theoretically recognizes that causation is located not only in individual attributes, but also in
networks within the social context (i.e. Forsgren and Johanson, 2014; Holm, Eriksson, and
Johanson, 1996), empirical research is not supported by appropriate methodological tools that can
reveal a network’s attributes within the social context.
In response to this shortcoming, the purpose of the present study is to propose SNA to IB
scholarship as a promising tool for systematically describing, modelling and analysing network
relationships. The key contribution of the study lies in demonstrating the rich potential of SNA in
revealing the interdependence of actor behaviours and IB activities within network relationships.
By suggesting a shift from an actor-centric to a relational focus in the unit of analysis, the study
presents how the use of SNA can lead to more nuanced understandings of existing network-based
theoretical frameworks and organizational conceptualizations.
The study is not primarily engaging in a technical analysis of network data, as there are
seminal sources (e.g. Borgatti, Everett, and Johnson, 2013; Wasserman and Faust, 1994) that can
guide IB scholars in SNA’s methodological application. Rather, it aims to draw the attention of
IB scholars to the untapped potential of SNA by exemplifying around two fundamental IB
phenomena: firm internationalization and multinational enterprises (MNEs). The utilization of
SNA in network-based IB research is far from exhausted. Hence, this is a timely and important
attempt, as building bridges with other disciplines and close integration between theoretical
development and empirical reality with appropriate analytical tools are considered to be exactly
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what IB research needs to proceed as a viable and progressive field (Buckley, Doh, and
Benischke, 2017; Cheng, Henisz, Roth, and Swaminathan, 2009).
The remainder of the paper is structured as follows. The next section introduces SNA with
its key concepts. It is followed by an extensive review of the IB literature to demonstrate how and
how far SNA has been utilized so far. The subsequent section develops the core arguments
around two fundamental IB domains in which SNA can advance our existing understanding. The
paper concludes with suggestions for future research directions in utilizing SNA.
2. Social network analysis
2.1. What is social network analysis?
A social network is defined as a finite set or sets of actors (e.g. people, organizations or other
social entities) and the relation or relations defined on them (Wasserman and Faust, 1994, p. 20).
Social networks play a fundamental role as a means of spreading information, ideas, resources,
and influence among members (Kempe, Kleinberg, and Tardos, 2003; Lea, Yu, Maguluru, and
Nichols, 2006). The basic assumptions at the heart of social network research include: that
exchange is embedded in social relations and complex social structures; that relationships do not
occur in isolation; and that relationships matter in terms of outcomes at both actor and group
levels (Kilduff and Brass, 2010).
SNA focuses on the analysis of relationships among social entities, and on the patterns
and implications of these relationships (Wasserman and Faust, 1994). It is not a formal theory,
but rather a set of analytical tools for investigating social structures (Marin and Wellman, 2011;
Otte and Rousseau, 2002). Based on the mathematical approaches of graph theory, it enables
relationships to be represented and described systematically and compactly (Hanneman and
Riddle, 2005; Scott, 2013). Where traditional social science methods have mainly relied on
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‘attribute data’ concerning the properties of particular actors, SNA deals with ‘relational data’
dealing mainly with the properties of network relationships among actors (Scott, 2013).
In contrast to traditional individualist methodological approaches that focus on actors as
the unit of analysis, SNA takes relationships among actors as the unit of analysis and asserts that
actors behaviours are influenced by the structural regularities of relationships surrounding them
(Borgatti and Li, 2009; Carter, Ellram, and Tate, 2007; Otte and Rousseau, 2002). Based on
Coleman (1958) earlier discussions, Fombrun (1982, p. 281) emphasized the distinction between
traditional methodologies and SNA:
In usual statistical analysis, [an] interview is regarded as independent of others…
[whereas in network analysis] an individual is seen as a part of some larger structure in
which the respondent finds himself…Thus, the individual is not treated independently. He
is seen embedded in a context that both constrains and liberates.
Thus, SNA offers the possibility of leveraging social and behavioural science research
through providing precise formal definitions of, and metrics for, aspects of the social context in
which actors are embedded (Wasserman and Faust, 1994, p. 3). In their seminal work,
Wasserman and Faust (1994, p. 4) identified four central principles of SNA that distinguish it
from other research approaches: (i) actors and their actions are considered to be interdependent
rather than independent; (ii) relationships between actors are seen as channels for tangible and
intangible resources; (iii) network patterns either facilitate or constrain individual actions; and
(iv) social structures are conceptualized as patterns of relations among social actors. In sum, the
relationships between actors, the properties of relationships and their influence on actors’
behaviour are among the prime concerns and the unit of analysis in SNA. Hence, SNA offers
Attributes and relational data are not the only types of data in social sciences: a third type of data is ideational data, which
directly describes the meanings, motives, definitions and typifications involved in actions (Scott, 2013, p.3).
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analytical tools distinct from the traditional methods of statistics and data analysis (Wasserman
and Faust, 1994).
2.2. Key concepts in social network analysis
This section introduces some of the key SNA concepts (i.e. open and closed networks,
actor centrality, and core and periphery structure), as core arguments in subsequent sections are
developed with reference to these SNA metrics. The concepts are mainly discussed with
reference to the concept of social capital, which is defined as the sum of the actual and
potential resources embedded within, available through and derived from the network of
relationships possessed by an individual or social unit (Nahapiet and Ghoshal, 1998, p.
Open network (structural holes)
An open network can be understood as a network structure in which structural holes exist.
Structural holes refer to links between otherwise disconnected groups (Burt, 1992, 2000). The
core proposition of structural holes is that network positions associated with the highest social
capital lie between rather than within dense regions of relationships (Walker, Kogut, and Shan,
1997, p. 112). The key benefit of open networks results from accessing complementary, novel,
and heterogeneous knowledge and resources (Reagans and McEvily, 2003). Additionally, firms
in open networks possess higher independence and greater latitude in their cooperative strategies
(Walker, et al., 1997). The IB literature has touched upon the concept of structural holes in
explaining the identification and exploitation of international business opportunities. For
example, international entrepreneurship is explained as a function of brokerage opportunities
relating to the position of structural holes (Ellis, 2011).
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Closed network (network closure)
Network closure refers to a network structure in which all actors are connected directly or
through third parties (Burt, 2001). This highlights the impact of cohesive networks on the
creation of social capital. The two fundamental outcomes of closed networks more specifically,
networks of densely interconnected contacts are access to information and facilitating sanctions
that make it less risky for people in the network to trust one another (Burt, 2001, p. 37; Coleman,
1988). The presence of common third parties facilitates trust and creates incentives to cooperate,
deriving from concern for one’s reputation and fear of group sanctions (Gargiulo, Ertug, and
Galunic, 2009). While network closure provides benefits in terms of social capital, it also
increases information redundancy, as cohesive and structurally equivalent contacts are likely to
have similar information (Burt, 1992, 2001; Gargiulo, et al., 2009). Additionally, a closed
network is likely to reduce actor autonomy in cooperative strategies with outsiders because of the
potential sanctions and expectations of others in the network (Gargiulo, et al., 2009).
Centrality is a property of a node’s position in a network (Borgatti, et al., 2013). As a metric
measuring actor positioning, centrality metrics are widely applied as indices of the power,
prestige, influence, prominence and importance
of nodes within a network (Brass, 1984;
Sparrowe, Liden, Wayne, and Kraimer, 2001). Centrality is mainly associated with instrumental
outcomes, such as an individual’s access to network resources and social capital. Central actors
have more relationships through which to obtain resources and also are less dependent on any one
single actor (Sparrowe, et al., 2001). Centrality also provides an advantage in terms of the degree
of control an actor might exert over the relationships and flow/exchange of resources. SNA offers
The basic assumption here is that an actor is important if the ties of that actor make the actor visible to other actors in the
network (Wasserman and Faust, 1994: 172).
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various centrality measures for the identification of the most important actor(s) in a social
network, including degree centrality, closeness centrality, betweenness centrality and eigenvector
centrality (see Borgatti, et al., 2013)
Core and periphery structure
Core and periphery structure is characterized by a cohesive subgroup of core actors and a set of
peripheral actors that are loosely connected to the core (Borgatti and Everett, 2000; Cattani and
Ferriani, 2008, p. 826). Actors located in the core or periphery are subject to different sets of
opportunities and constraints. While the core nodes enjoy the flow of tacit knowledge in dense,
close-knit networks in which they are embedded, the peripheral nodes have the advantage of
connections outside the network that facilitate novel information flows (Cattani and Ferriani, 2008).
Table 1 illustrates the SNA measures explained above.
Insert Table 1 around here
3. Applications of SNA in international business research
In order to determine the status quo of SNA in international business research, an extensive
literature review was conducted in leading IB journals, following the study of Tüselmann,
Sinkovics, and Pishchulov (2016), which provided a recent ranking of IB journals. Although this
does not cover the complete set of possible outlets publishing IB-related research, we believe that
the selected journals are a representative of the research trends in terms of both the phenomenon
of interest and the field in general. The journals included in the review are presented in Table 2.
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Insert Table 2 around here
The literature review, conducted through key academic publishing databases (i.e.
ABI/Inform, Elsevier ScienceDirect, Emerald Insight, and Google Scholar), revealed 20
academic articles that applied SNA in the IB field. The website of each journal was also searched
for articles employing SNA. The review assessed the main motivation for the application of
SNA, the type of network data used, and the software employed for social network analysis.
Table 3 lists all the identified articles that use SNA in IB journals.
Insert Table 3 around here
The review provides evidence of limited yet increasing utilization of SNA in IB research,
particularly in recent years, and shows that authors key motivation for using SNA was its ability
to generate empirical insights into structural and relational patterns among social actors.
Applying SNA leads to a better representation of the interdependence of actors and hence deeper
understanding of their behaviours within different network structures. The studies generally used
SNA measures such as network density, network range, degree, closeness, and betweenness
centrality. Through employing SNA, these articles aimed to develop existing understandings of
various IB topics, including knowledge/information flows, talent management, firm
internationalization, corporate social responsibility and organizational learning. The studies
largely used UCINET as analysis software, but other software packages (i.e. Gephi, Pajek,
Bibexcel) were also employed to reveal the structural and positional attributes of networks and
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actors. The key data sources for these studies are both quantitative primary data collected through
social network surveys, and secondary archival, co-citation and patent data. The next section
develops ideas of potential IB topics in which SNA can advance existing understanding.
4. Potential avenues for the application of SNA in the IB field
Although SNA can be applied to virtually any sub-domain of the IB field, the objective here is to
delineate the potential of SNA by showing how and how far it can advance existing knowledge.
Drawing upon recent discussions of IB scholars in tackling big questions (Buckley, 2002;
Buckley, et al., 2017; Buckley and Ghauri, 2004; Peng, 2004), we identified two major areas that
have propelled the development of IB as a research field: namely, the internationalization of
firms and the MNE phenomenon. The rationale of focusing on these topics is twofold. First,
understanding the internationalization of firms has been a core pillar of IB research and central to
multiple theoretical approaches, including new international ventures and born-global
frameworks, the regionalization theory, and the process model (Riviere and Bass, 2018). Second
is the pre-eminence of the MNE as the global organization of interest within the IB field (Teegen,
Doh, and Vachani, 2004). MNEs are regarded as dominant actors in international business
activities and an ideal context for the development of IB theories (Roth and Kostova, 2003;
Rugman and Brain, 2003). Furthermore, through the inclusion of network thinking, these two
research bodies have witnessed a tremendous evolution in advancing both traditional theoretical
models and organizational conceptualizations, such as the revised Uppsala internationalization
model (Johanson and Vahlne, 2009) and the global factory (Buckley and Ghauri, 2004). Hence,
these two central tenets of IB research serve as ideal contexts to demonstrate the rich potential of
SNA for IB research.
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4.1. Revisiting internationalization research with SNA perspective
4.1.1. Internationalization and network theory
Internationalization has been one of the main research streams in IB (Buckley, 2002).
Internationalization research, particularly studies focusing on small and medium-sized enterprises
(SMEs), born-globals and international new ventures, has extensively employed a network
perspective (Cavusgil and Knight, 2009, 2015; Coviello, 2006; Hånell and Ghauri, 2016;
Kontinen and Ojala, 2011; Odlin and Benson-Rea, 2017; Sinkovics, Kurt, and Sinkovics, 2018).
Although this body of the literature recognizes networks as effective means of accessing external
resources, the fact that networks vary in terms of the extent to which they provide accessible
resources has been mostly overlooked. In other words, previous network-based
internationalization research has applied a static and generic network view and thus left
considerable variance between different network configurations and their subsequent network
outcomes unexplained.
While several theories have been developed to explain the internationalization of firms,
Johanson and Vahlne's (1977) Uppsala model has been one of the most influential in explaining
the process of firms’ gradual commitment to foreign markets. The model introduced the liability
of foreignness as the key impediment to internationalization and discussed the process through
which firms gradually increase their market knowledge and market commitment. This model has
received criticism for being deterministic and firm-centric, but later conceptualizations have
incorporated a network perspective in explaining the internationalization (Johanson and Vahlne,
1990, 2006, 2009; Vahlne and Johanson, 2013). The most dramatic shift was introduced in the
2009 revised model, in which the concept of the liability of foreignness was replaced with the
liability of outsidership (Johanson and Vahlne, 2009; Yamin and Kurt, 2018). The revised model
viewed markets as webs of network relationships and asserted that firms internationalize within
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networks of connected business relationships (Johanson and Vahlne, 2009). This model was a
full-blown application of network theory to internationalization research (Yamin and Kurt, 2018).
The revised model created room for new research, which probed the network component
of the phenomenon more deeply, through employing the theoretical apparatus of SNA. In one of
these studies, Yamin and Kurt (2018) employed the SNA-related structural and positional
attributes of networks to theorize the relationship between the liabilities of foreignness and
outsidership. The paper argued that the structural characteristics of the target network affect the
motivations of both insider and outsider actors, in terms of overcoming the liability of
outsidership. Moreover, the perceived liability of foreignness of the outsider determines whether
the outsider should build its insidership within a closed or open network, considering the different
benefits of both in facilitating tacit knowledge-sharing as opposed to explicit information flows
(Kurt and Yamin, 2016; Yamin and Kurt, 2018). The recent studies utilizing SNA-related
concepts also shed light on the potential empirical application of SNA to internationalization
4.1.2. Internationalization and SNA
Internationalization research has relied extensively on attribute data and traditional
methodological perspectives, which concern the focal actor explaining its internationalization in
terms of notions such as firm resources, managerial capabilities and international experience.
Data was primarily collected through surveys and interviews and analysed with traditional
statistical tools. The utilization of relational data in revealing the role of social structure in
influencing firm internationalization has been rare, with few exceptions (i.e. Coviello, 2006).
Through integrating relational data, SNA can contribute to this body of IB research in
various ways. Firstly, whereas Johanson and Vahlne (2009) argued that building insidership is a
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necessary condition for successful internationalization, they did not explicitly specify how and
how far the characteristics of the target network in which the outsider builds an insidership
position can facilitate/impede or expedite/decelerate the internationalization process (Yamin and
Kurt, 2018). They indicated that anything that happens, happens within the context of a
relationship, and a firm that is well established in a relevant network or networks is an “insider”’
(Johanson and Vahlne, 2009, p. 1415). They employed a generic network view and did not
clearly articulate what well established means in the network context. Different perspectives
have also emerged from disagreements over what ‘better connected’ means (Yamin and Kurt,
2018). The social network literature provides two fundamental competing views regarding the
well established’ (i.e. better-connected) dichotomy. Building on the concept of social capital,
Coleman (1988) argues that actors are better connected in dense networks, whereas advocates of
open networks argue that firms occupying the structural holes position are better connected and
more well-established (Burt, 2001). In other words, while network closure argues that social
capital is created in densely-connected networks (Coleman, 1988), the structural holes
perspective argues that social capital is an outcome of the brokerage role between otherwise
disconnected groups (Burt, 2000).
SNA can enable identification of the most valuable ‘well established status for an
internationalizing firm in a target network that provides the required social capital for entering
the market. For instance, building an insidership position in an open network for entering a
psychically close market might be a viable strategy, as the cost of building relationships in an
open network is likely to be relatively low. Further, the information benefits of an open network
in this context would be sufficient, considering the low level of the liability of foreignness and
psychic distance between home and host markets (Yamin and Kurt, 2018). On the other hand, a
firm seeking to enter a psychically distant market would benefit more from building an
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insidership position in a dense network structure, which can provide social network benefits to
overcome high liability of foreignness. However, the cost of building insidership in a dense
network is likely to be higher.
Secondly, building insidership is a two-sided process and both insider and outsider should
be motivated to overcome (or help to overcome) the outsidership. The motivational disposition of
the insider in helping the outsider is bounded by the network structure in which the insider is
embedded. Actors in open networks are likely to have more flexibility in opening doors for
outsiders, while actors in closed networks are likely to be restricted by dense network structures,
as adding a new actor eventually affects all relationships in a closed network (Yamin and Kurt,
2018). Therefore, SNA can reveal the structure of the foreign market network, in which the
optimal insider actor can be targeted to build the most effective insidership position.
Third, the positional features of the insider actor through which the outsider wishes to
build insidership also affect the internationalization process. SNA enables identification of the
key actors who can provide the necessary resources required to internationalize successfully. For
instance, linking to a central actor in the target network can provide reputation capital, legitimacy
and acceptance in the target market. Yet, it demands the investment of more resources and time
to convince the insider. On the other hand, building insidership through a peripheral actor is
likely to be faster and less costly. If an internationalizing firm needs only basic market
information, then it would be more feasible to connect to a peripheral actor for market entry. A
firms choice of whether a central or peripheral actor would be more beneficial is shaped by their
perceived liability of foreignness in the target market and the costs of building insidership.
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4.1.3. SNA and overcoming the liability of outsidership: An illustrative example
To give a visual representation of the role of network structure and actor positioning in accessing
different forms of social capital required for internationalization, a hypothetical network scenario
case, in which node 15 seeks to enter a host country through building an insider position in the
target network, is provided below (Figure 1).
Figure 1 around here
Starting with the home country network, previous network studies investigating the role
of home country networks in firm internationalization implicitly assume that all actors embedded
in a home country network are able to access the same network resources and social capital.
However, the structure of networks surrounding the focal actors and the actors position within
the network affect the type and level of social capital and resources available. For instance,
whereas node 15 enjoys the benefits and social capital created in its surrounding dense network
and high central position, node 22 does not have access to the same level and type of social
capital, due to its peripheral position in an open network (Burt, 2001; Coleman, 1988). Similarly,
node 18 lacks the social capital created in the dense network, while its structural holes position
enable it to access novel information from otherwise disconnected sub-groups (Burt, 2001).
Secondly, regarding overcoming the liability of outsidership and host country networks,
the structural attributes of the target network and the position of the insider within it are not a
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feature of Johanson and Vahlne's (2009) insidership analysis. Their theory argues that insidership
is built within target host country networks displaying trust and commitment, reflecting a dense
network structure, which entails trust and commitment, in the host country. However, as
indicated by Yamin and Kurt (2018, p. 3), ‘not all networks are the same nor [do] all network
relationships necessarily engender trust and commitment or to the same extent. For instance,
open networks have relatively low levels of relational trust compared to closed networks. Based
on Johanson and Vahlne's (2009) insidership perspective, one would expect no difference, if node
15, as an internationalizing firm, is connected to either node 1 or node 8 within the target network
of the host country. However, from the SNA perspective, building an insidership position via
connecting to node 1 provides benefits in terms of social capital produced in dense networks (i.e.
trust, relational norms, and sensitive/tacit knowledge). On the other hand, building insidership in
the same target network of the host country via node 8 cannot provide the same type and level of
social capital. Node 8 can only provide social capital created in open networks, such as flows of
non-redundant and novel information.
On the other hand, the cost of building insidership via node 1 is likely to be higher than an
insidership position built via node 8, as insidership in closed networks requires more resources
and time than open networks. Decisions on whether a firm should build insidership in open or
closed networks in a host country depend on an analysis of the cost of insidership and the type of
social capital needed for successful internationalization. For instance, building insidership in an
open network for entering a psychically close market might be a viable strategy, for two reasons.
First, the cost of building relationships in an open network is likely to be lower than that of a
closed network. Moreover, the information and resources acquired via an open network would be
sufficient for internationalization, considering the low risk of foreignness and psychic distance
(Kurt and Yamin, 2016; Yamin and Kurt, 2018). Therefore, building insidership via node 8
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would be a more viable strategy for the internationalization of node 15 if the host country is
psychically close. On the contrary, internationalization to psychically distant markets requires
insidership in closed network structures, as the firm needs tacit and sensitive knowledge that can
be obtained via trust-based closed networks. The internationalizing firm is likely to invest in
building insidership in closed networks only if the expected benefits exceed the cost. Expected
benefits of social capital created in dense networks would be valued more highly if the firm has
high liability of foreignness in relation to the host country. Therefore, building insidership via
node 1 would be a viable strategy for the internationalization of node 15 if the host country is
psychically distant.
In sum, a deeper and more nuanced understanding of overcoming the liability of
outsidership requires paying closer attention to the structural characteristics of networks in which
internationalization takes place. Internationalization cannot be fully explained by the individual
attributes of internationalizing firms alone. It requires a broader perspective that considers the
attributes of networks and actor interdependence within the social structures in which
internationalizing firms are embedded, rather than seeing networks as similar entities. SNA can
be used as a significant methodological tool that reveals structural and positional attributes of
networks of both home and host countries, across which internationalization occurs. Hence, IB
scholars and managers of internationalizing firms could gain a richer understanding of
overcoming the liability of outsidership in networks.
4.2. Reconsidering multinational enterprises through the lens of social
network analysis
The research on the existence, organization and strategy of MNEs is a fundamental pillar of the
IB field (Buckley, 2002; Peng, 2004). Further, IB scholars agree that the distinctive
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characteristics of the MNE context (i.e. heterogeneity, complexity) hold promise in terms of
enriching existing theoretical models or developing new IB theories (Roth and Kostova, 2003).
However, as indicated by Roth and Kostova (2003, p. 894), this promise can only be fully
realised through more rigorous and systematic approaches. Similarly, Dhanaraj (2007, p. 1233),
in his review of the book by Forsgren, Holm, and Johanson (2005), suggested the use of recent
advances in network analysis for developing more nuanced understandings of the network
structures of multinationals. In this respect, SNA may reveal the complex intra- and inter-
organizational network structures of today’s MNEs in their heterogeneous and complex social
contexts. In turn, MNE behaviours, strategies, performance outcomes, and their interdependence
with social/network contexts could be better understood. In a similar vein, this study suggests the
use of SNA to complement the theoretical developments in the network conceptualization of
MNE with appropriate analysis of the empirical reality. The following sections discuss how this
body of research provides an ideal context for the utilization of SNA, which can then contribute
to a more nuanced understanding of networked-MNEs.
4.2.1. MNEs as networked organizations
Early IB research and theories aimed to understand the existence of MNEs (Buckley and Casson,
1976; Coase, 1937; Dunning, 1988; Hennart, 1982; Penrose, 1959). Where earlier studies
considered multinationals as closed systems vis-à-vis markets, later conceptualizations
incorporated a relational approach and extended the boundaries of MNEs into markets seen as
webs of network relationships (Buckley, 2009b; Forsgren, et al., 2005; Ghoshal and Bartlett,
1990). As indicated by Cantwell, Dunning, and Lundan (2010, p. 569), an MNE is now
understood as a coordinated system or network of cross-border value-creating activities, some of
which are carried out within the hierarchy of the firm, and some of which are carried out through
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informal social ties or contractual relationships. Similarly, Forsgren, et al. (2005) argue that
understanding MNEs requires consideration of their embeddedness in business networks in order
to generate more complete findings. The analysis carried out by Forsgren, et al. (2005) revealed
the importance of business networks in understanding MNEs as networked organizations. As
today’s MNEs are becoming a system of differentiated networks, Buckley and Ghauri (2004)
concept of ‘the global factory’ serves as the most appropriate and fruitful conceptualization of
MNEs for the integration of SNA into the MNE research context. Hence, the arguments in this
section will be developed with reference to the global factory.
4.2.2. Global factory as a networked MNE
Buckley and Ghauri (2004) introduced the concept of the global factory as a new structure for
an MNE. From a Coasean externalise or internalise point of view, the global factory reflects the
externalization of activities through outsourcing (Buckley, 2009a). This emphasizes the role of
the centre (HQ) as the orchestrator of complex and extensive networks of organizations, within or
beyond the legal boundaries of the focal firm (Buckley, 2009a, 2011; Buckley and Ghauri, 2004;
Yamin, 2011). The global factory model depicts a complex web of relationships among brand
owners, contractors and suppliers, which together denote different levels of activities (i.e. design,
R&D, manufacturing, distribution) under the control of the brand owner. Buckley's (2009b)
original discussion emphasizes the importance of the structural attributes of the network in
affecting the benefit/cost outcomes of those networks:
Global factories are both horizontal and vertical networks…The benefits of the horizontal
network arise from learning and the diffusion of knowledge. The benefits of the vertical
network arise from the coordination of activities…The degree to which benefits outweigh
costs depends on the extent to which the global factorys networks are open and
transparent versus being closed and opaque. (Buckley, 2009b, pp. 229-230)
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As Buckley indicates above, the structural attributes of networks (i.e. open versus closed)
determine the outcomes of horizontal and vertical networks (i.e. learning, co-ordination) that
constitute the global factory. Buckley’s conceptualization of the global factory is also related to
the ‘better connected’ dichotomy in terms of whether open or closed networks are more
beneficial for the lead firm in orchestrating activities. Different enabling features of network
structures, such as facilitating the transfer of tacit knowledge in closed networks versus the flow
of novel information in open networks, can provide different benefits for the lead firm. On the
other hand, the costs of building and sustaining relationships in open or closed networks are
different. Therefore, firms decisions on developing networks in open or closed networks can be
understood as a result of their cost-benefit analysis.
For instance, developing closed networks around core functions (i.e. design, engineering
and R&D) can facilitate the flow of tacit knowledge among tightly-connected units. Closed
networks foster learning through increasing trust and the willingness of units to try to transfer
knowledge, curbing opportunism and creating cooperative norms via third-party ties (Cavusgil,
Calantone, and Zhao, 2003; Reagans and McEvily, 2003). However, developing and sustaining
dense networks comes with two fundamental costs. One is the high investment in terms of time
and resource required for forming and sustaining networks with network partners; and the other
relates to the paradox of embeddedness (Uzzi, 1997). Actors embedded in dense networks may
lack access to novel and non-redundant information that exists beyond their network (Fritsch and
Kauffeld-Monz, 2008), which can impede their performance.
Conceptualization of the global factory as a networked organization consisting of vertical
and horizontal networks provides a rich context in the utilization of SNA. For instance, executing
an appropriate cost-benefit analysis of different network structures, as suggested by Buckley
(2011), requires one to reveal and clearly visualize open and closed network structures. The
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optimum network structure based on cost-benefit analysis, which provides competitive
advantages, can be achieved via effective network management through applying SNA.
4.2.3. Coordination and control in the global factory and SNA
A recent relevant discussion of the global factory revolved around who controls dispersed
activities and captures the rents earned in global value chains (GVCs) (Buckley and Strange,
2015). The positions of the actors (either lead firm or suppliers) and the structure of the network
in which value chain activities are carried out affect the distribution of power and rent in GVCs.
Forsgren, et al. (2005) note that MNE subsidiary power comes not only from unique resources,
but also from unique network position. For instance, external embeddedness of the subsidiary,
through which it can access heterogeneous resources via its structural holes position,
contributes its power within the MNE. Regarding power relationships within the global factory,
Buckley (2011, p. 280) indicated that:
The position of the MNEs headquarters in the global factory is important to its
power…power is a function of centrality. The more physical and knowledge links that the
headquarters possesses in the global factory, the more it might be argued to have power
over the global network.
Thus, we need to borrow credible measures from SNA (i.e. centrality) to reveal the
positional attributes of the actors and understand the power dynamics within the network
structure of the global factory. Centrality has been amongst the most fundamental concepts in
SNA and is highly associated with power (Borgatti, 2005). Central actors are those tied to a
greater number of other actors than those who are peripheral actors (Mizruchi and Potts, 1998).
Power is function of an actor’s ability to monopolize the dependence of other actors, which is
derived from its structural position in its surrounding networks (Cook, Emerson, Gillmore, and
Yamagishi, 1983; Mizruchi and Potts, 1998). In the global factory, the assumption is that the lead
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firm has the ability to monopolize the dependence of contractors, suppliers and other actors.
However, the power of the lead firm in the value chain activities can be better understood through
revealing its position within the network structure. Hence, SNA offers numerous measures,
including degree centrality, closeness, betweenness and eigenvector centrality (Borgatti, 2005),
which can reveal whether the focal actors position generates any power and control benefits.
Furthermore, Buckley (2011) also highlighted the need and value of employing SNA
metrics in understanding coordination of the global factory. Success in the global factory is
considered to be dependent on the effective orchestration and coordination of activities across
both ownership and non-ownership ties of globally interconnected units. Following Ghoshal and
Bartlett (1990), Buckley (2011, p. 280) further argued that the performance of the global factory
is dependent upon (1) the density and (2) the cohesiveness of (a) the internal networks and (b)
the external networks of global factories. Therefore, understanding the antecedents of the
performance of the global factory as well as the embedded multinational requires credible
SNA measures, such as density, coherence, and other metrics measuring network structures. Both
the internal networks of the global factory and its embeddedness within the external networks
affect its performance. Managing this complexity in networks requires appropriate analytical
tools to map the relationships. Hence, empirical application of SNA can hence develop a more
nuanced understanding of the structure, organization and performance of todays networked
multinational organizations.
4.2.4. An overview of SNA’s potential utilization in the context of MNE research
Based on the above arguments positing the importance of network relationships in the
organization and strategy of the global factory, SNA can further contribute to the MNE research
context in various ways. Firstly, unlike earlier studies that conceptualized multinationals as
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closed systems vis-à-vis markets, the relevant contemporary literature agrees that MNEs are
networked organizations. In particular, the concept of the global factory reflects an absolute
network understanding of MNEs. The success, governance and control of the global factory are
associated with its capability to orchestrate a complex web of networks of globally
interconnected units. However, current studies only benefit theoretically from the notion of a
network to understand the global factory. Hence, empirical utilization of SNA can enable
scholars and practitioners to reveal and understand the network structure of globally
interconnected value chain activities organized by HQs, through which control, governance, rent
capturing and performance dimensions can be appropriately understood.
Secondly, Rugman and Verbeke (2004) introduced a dichotomy between regional MNE
and global MNE through focusing mainly on downstream sales of MNEs. Despite a common
perception that multinationals pursue global strategies, their study showed that most of the
worlds largest companies are not global, but regional. They indicated that a strong discrepancy
between intra-regional and inter-regional sales is likely to have important implications for MNE
structure (Rugman and Verbeke, 2004, p. 14). Regional MNEs are treated as complex,
differentiated organizational systems vis-à-vis global MNEs. The success of regional MNEs is
associated with their ability to overcome the regional effect, which is conceptualized as a
liability of outsidership imposed on subsidiaries operating in the host region (Verbeke, Kano, and
Yuan, 2016). In other words, building insidership in the host region via subsidiaries and hence
exploiting location-bound, firm-specific advantages (FSAs) are key critical success factors for
regional MNEs. This requires clear empirical evidence of the network structure of host regions in
which optimal insidership positions can be developed by considering the distinctive enabling
characteristics of different network structures and actor positions. In this respect, SNA can enable
us to visualise network structures in host regions, through which imperfections across national
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and regional factor markets can be optimally exploited, and production and coordination costs
reduced (ibid.). Similarly, SNA can help us to better understand the well-known Bartlett and
Ghoshal (1989) matrix through empirically substantiating the structural differences between
transnational, global and multi-domestic MNEs.
5. Discussion and suggestions for future research
Recent studies have criticised the state of the IB field and recommended ways in which IB
research can progress (Buckley, et al., 2017; Buckley and Lessard, 2005; Delios, 2017). The key
criticism has been the ‘inward-looking’ approaches of IB scholarship, which restricts
interdisciplinarity (Buckley, et al., 2017). The success of IB in its early decades was associated
with its interdisciplinary roots, which integrated concepts and tools from different disciplines in
seeking to answer the big questions (ibid.). Similarly, a recent and important recommendation
for advancing IB research is to incorporate interdisciplinary perspectives and use state-of-art
methodological approaches to develop innovative research designs that acknowledge
interdependencies among social actors in the global environment (Buckley, et al., 2017).
Buckley (2002, p.370) argued that these successes were achieved by identifying the key
empirical factors in the global economy which needed to be explained and then searching out a
tractable means of explication within a coherent theoretical framework. Today, as markets are
seen as a web of networks where actors are interlinked via relational ties, the success of the field
very much depends on appropriate efforts to understand actor interdependence within the social
structures where IB activities take place. Hence, IB scholars need to be equipped with appropriate
analytical tools to be able to identify key empirical factors.
Moreover, a close relationship between theoretical development and empirical reality has
been considered the key strength of past epochs of IB research (Buckley, 2002). However, an
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interdisciplinary perspective and a close interaction between theory and empirical reality have not
been yet achieved in network-based IB research. A major impediment has been IB scholars stand
in favour of traditional methodologies and a reluctance to apply state-of-art methodological
approaches to network relationships. In this vein, SNA, as an analytical tool borrowed from
sociology, has tremendous potential in advancing fundamental understanding, particularly in the
IB field, as the notion of networks has been extremely rewarding in answering big questions.
In response to aforementioned recommendations for more interdisciplinary IB research
through the integration of ideas and methods from different disciplines, this study is a timely
attempt to suggest SNA to IB scholars as an analytical research tool. It contributes to the IB field
by demonstrating the potential of SNA through articulating its potential application to two tenets
of IB: firm internationalization and MNEs. However, the study’s implications are applicable to
any domain of IB.
Further, SNAs previous successful applications in other disciplines (i.e. supply chain
management, economic geography, knowledge management and innovation) can also shed light
on its application in multiple sub-domains of IB research. Firstly, SNA offers great potential for
supply chain management (SCM) research in investigating how patterns of network relationships
translate into competitive advantage through the management of resource flows, diffusion of
information, social control of opportunism and coordination, amongst others (Borgatti and Li,
2009). While early SCM research focused on linear relationships between buyers and suppliers,
recent studies have benefited from SNA to capture the complexity of the larger supply network in
which the firm is embedded (Kim, Choi, Yan, and Dooley, 2011). SNA contributes to the SCM
literature through revealing vertical and horizontal network interdependencies between multiple
firms participating in a supply chain. Previous studies also pointed out the managerial importance
of revealing interdependencies in supply chain network structures by highlighting that firms that
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understand and deliberately reconfigure their supply networks can outperform competitors
(Carter, et al., 2007; Choi, Dooley, and Rungtusanatham, 2001). Furthermore, as noted by
Lazzarini, Chaddad, and Cook (2001), firms can design effective coordinating mechanisms by
considering different interdependencies emerging from strong or weak ties via employing SNA.
Building on existing developments in the integration of SNA into the SCM context, IB
scholars can extend this body of research by examining global supply chains in which supply
networks and buyer-seller relationships cross borders. Managing global supply chains effectively
is a prerequisite for remaining competitive for MNEs. Hence, IB scholars and practitioners can
benefit considerably from SNA as a means to analyse the complex and dynamic nature of supply
chains and the effect of potential perturbations of supply networks (Wu, Blackhurst, and O’grady,
2007). Revealing global supply chain network structures via SNA may have implications for
designing robust supply network configurations against possible supply disruptions (Kim, et al.,
2011). Moreover, today’s compound political, social and economic uncertainties, emerging from
anti-globalization sentiments and protectionist policies (Sinkovics, et al., 2018), are likely to have
a serious effect on global connectivity and the sustainability of global supply chain activities. In
this vein, SNA might be of profound importance in responding to potential disruptive challenges,
through examining supply chain networks and thus analysing resilient supply chain
Secondly, in economic geography, SNA has been considered a promising tool for empirically
investigating the structures and evolution of inter-organization networks and knowledge flows
within and across regions (Ter Wal and Boschma, 2009, p. 739). The development of global
value chain (GVC) and global production networks (GPN) perspectives in this field has brought
valuable insights to the social and political relations between actors involved in the process of
value capture in the production of commodities (Cumbers, Nativel, and Routledge, 2008). As
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previously suggested, the GVC/GPN literature can contribute to key debates in IB research,
particularly those concerned with networked multinationals (Azmeh and Nadvi, 2014). Therefore,
building on SNAs previous successful application in relational economic geography, IB research
can also utilize it for analysing complex and geographically dispersed webs of production
networks, which IB considers to be orchestrated by leading MNEs. Additionally, in her research
incorporating a relational perspective into GVC governance, Kano (2018) argued that
orchestrating firms can enhance sustainability and efficiency outcomes in GVCs through using
social mechanisms, including network relationships. Accordingly, SNA can foster this
understanding through revealing the network structure and interdependencies within the social
context in which GVCs are embedded, and thus allow the design of resilient value chain
Finally, previous research investigating different network contexts needs to be revisited
through empirically integrating social network data and analysis into existing knowledge and
understanding. For instance, informal constraints constituted within interpersonal networks in
emerging markets (i.e. guanxi, blat, and chaebol) are accepted as effective safeguards against
opportunism, and facilitate transactions when formal market-supporting institutions are
underdeveloped (Peng, Sun, Pinkham, and Chen, 2009). However, social capital benefits such as
social norms curbing opportunism, cooperative behaviours and trust can emerge in the context of
closed network structures. Therefore, understanding the effectiveness of these social networks in
navigating business activities in institutionally weak environment requires systematic analysis of
their structural configurations, in which both densely- (closed network) and loosely-connected
(open network) regions within the overall network might exist. For example, building an
insidership position within a guanxi network might not simply translate into informal constraint
benefits if the focal actor builds networks in loosely-connected guanxi structures. SNA can
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empirically reveal structural configurations and attributes of these network systems and their
impact on international business activities.
A longitudinal approach can empirically reveal dynamic changes of network structures
and actor positions over time and the effect of these changes on international business activities.
We hope this study stimulates future research that utilizes SNA in developing more precise and
nuanced network understanding in IB research and thus contributes to the progressive
development of the field.
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6. Appendix Figures and Tables
Table 1. Visual representation of SNA measures.
Table 2: IB journals reviewed for SNA application
Number of
using SNA
ABS 2018
Taylor & Francis
Taylor & Francis
Taylor & Francis
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Table 3: Articles using SNA in international business research
Motivation for Applying SNA
SNA Data
Turkina and Van
Assche (2018)
We then combine insights from international
business theory, economic geography, and
social network analysis to evaluate how a
cluster’s relative position in the global cluster
network relates to (1) the type of value chain
activities in which it specializes, and (2) the
type of international organization-based
linkages that disproportionately strengthens
local innovation.(p.707).
dataset on formal
linkages between a
network of cluster
Devinney and
‘We…visualized and analyzed the results via
social network analysis (p. 50)
Network methods [SNA] are generally
accurate and effective…and allow the display
of a larger number of documents in
meaningful ways (p. 61).
proximity scores
Gunnigle, and
Lavelle (2014)
‘[U]sing quantitative social network analysis […]
allowed a greater visually generated empirical
exploration of the structural and relational
patterns under review (p.137)
Social network analysis was employed to further
substantiate the composition of this institutional
network and to explore the relative centrality of
actors more effectively (p.138).
data collected
through social
Chua, Morris,
and Ingram
The current research used methods of social
network analysis to investigate trust as a
differentiating dimension between Chinese and
Western networks (p. 503).
network data
Coviello (2006)
As changes in network structure are expected to
cause changes in the venture’s social capital
(Borgatti et al., 1998; Burt, 2000), analysis
focused on the key structural dimensions of the
network and patterns of structural change (p.
719). UCINET 6 was used to compute network
range, network density, closeness centrality and
betweenness centrality of international new
ventures (pp.719-720).
each firm’s
into network
‘[W]e will explore whether the roles and the
positions of countries in the network are related
IMF dataset to
identify the
structure and
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Casanueva, and
Castro (2019)
to their trade expansion and development
performance (p.697)
the topology of
the Global FDI
Castro and
Roldán (2013)
The study uses SNA in order to analyze the
structural dimension of inter-organizational
networks through focusing on centrality
measure[s]’ (p. 1041).
relational data
was collected
from the Public
Andersson, and
Seppälä (2012)
To understand how structural boundaries
influence knowledge exchanges.
Network data
through name
and Úbeda-
García (2017)
The research developed here through the use of
citation and co-citation analysis and social
networks analysis allowed us to examine and
represent the structure or intellectual base of
research on the phenomenon of born global firms
or international new ventures (INVs) (p. 645)
Henisz (2013)
I add insight from social network analysis
(Wasserman and Faust, 1997) to better represent
stakeholders as embedded in a network structure
that both enables and constrains their behavior
(p. 341).
Awate, Larsen,
and Mudambi
We then conduct a comparative network analysis
along the breadth and depth of the knowledge
bases to shed light on how Suzlon’s innovation
capabilities differ with respect to Vestas (p. 209).
cited patents
Wang, Dong, Si,
and Dou (2017)
In step two, social network analysis (UCINET;
Borgatti, Everett & Freeman, 2002) was used to
identify the key elements in each type based on
their degree centrality and betweenness
centrality (p. 467).
turnover events
Li, Li, Shu, and
Zhou (2015)
Finally and most interestingly, we have applied
the method of network analysis to the
identification of the co-citation pattern among the
listed overseas Chinese scholars (p. 1086).
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Frenkel, Sanders,
and Bednall
In order to test H3, which posits HRline
management relations as a moderator in the
relationship between extent of agreement between
SM and LM relations and the two employee
outcomes, we add HRLM relations as measured
in the social network analysis and the interaction
between this variable and the extent of agreement
between SM and LM relations (p. 19).
data collected
through social
Ho and Chiu
Social network analysis and theory help us not
only delineate the individual actors in the
knowledge flow network but also to determine
network ties, relations, frequency, and density
(p. 1266).
Patent data
from USPTO
(US Patent and
Office) patent
Tang and Xi
‘[W]e compared network positions using
Stephenson and Zelen’s (1989) information
centrality measure, which calculates centrality
based on all possible paths and takes into
consideration the weight of the relation, using the
UCINET network analysis package (p. 196).
data based on
the average of
the estimates
of interaction
by each
member in the
Peng, Au, and
Wang (2001)
Exploring interlocking directorates allows
researchers to “map” out the interorganizational
network of corporate governance (p. 162).
archival data
Smith, Ryan, and
Collings (2012)
‘[T]his research seeks to make a contribution
methodologically, by using social network
analysis and interview techniques to investigate
how external knowledge emerges with rapid
internationalising born globals (p. 574).
Whelan (2011)
To aid in the identification and management of
talented employees in knowledge intensive
settings, this paper proposes an approach based
on social network analysis (SNA) a
methodology that analyses the relationships of
actors, such as employees, in a network context
(p. 485).
data collected
through social
Vohra and
Thomas (2016)
To understand the process through
which people acquire and disseminate
information based on social relationships, we use
data collected
through social
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social network analysis as a method to study
organizational learning (p. 588).
Figure 1: SNA and internationalization: an illustrative example
... Different topics have been raised and discussed: organizational innovation [15], innovation capability in SMEs [16], or digital innovation in knowledge management systems [17] among others. In the same way, systematic literature review about international business is copious, holding various topics of investigation: knowledge flows in multinational corporations [18], business systems theory [19], social network [20], or culture [21,22]. ...
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Introduction Innovation and international business are essential to achieve competitive advantages in currently unforeseen business environments. Today's company seeks innovation in its country of origin and abroad in order to compete globally. Thus, incorporating this concept into international companies' strategies is a main issue nowadays. Purpose The aim of this systematic study is to improve the current knowledge on the relationship between innovation and international business, as well as identifying innovation tendencies for corporations to acknowledge the opportunities and challenges of this area's development in the international business context. Methodology Despite the abundance of innovation and international business reviews, joint reviews of both of them cannot be found. This study is the first to combine the scholarly research on both topics with the systematic literature review of academic literature of 28 years, following the PRISMA guidelines and flowchart. A search was carried out in Web of Science database; 847 initial documents were obtained and, after reviewing multiple documents according to the inclusion/exclusion criteria, the results for this research work were reduced to 236 articles. Results The results of this research provide an overview of the knowledge structure of innovation and international business. As the main contribution, the results highlight four themes of investigation within a comprehensive and multidimensional framework: Innovative activities of multinational corporations, Global value chains, Innovation in emerging economies, and Cross-border knowledge. With an international perspective, insights from how to face innovation development in the international business context are presented. Conclusions There is a strong relationship between innovation and international business. These four research trends highlight the strategic importance of innovation in the international business field. Finally, the most interesting paths for future research are identified, targeting opportunities for improvement in both areas. This systematic literature review is expected to make significant contributions to both theory and practice in the field of innovation and international business.
... Digitization has opened powerful new ways for large companies to connect with global markets, resources, and partners and to pursue innovation and value creation at international business (Nambisan 2022). International business research focuses on the key decisions taken by firms while expanding their operations outside national boundaries (Kurt and Kurt 2020;Paul and Mas 2020;Srivastava et al. 2020). This increased attention on international business and marketing activities as we saw previously by large companies and researchers improves the literature review and the evolution of these two concepts. ...
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... Social network analysis has been widely used in the research fields of urban spatial structure, industrial clusters, government governance, international trade, etc., and gradually become a new research paradigm (Kurt and Kurt, 2020;Benítez-Andrades et al., 2020). We use the gravitational force data between districts calculated by the urban spatial gravity model as the base data for the social network analysis method. ...
The metro transportation network in large cities is one of the most important factors affecting urban spatial structure. To further understand the role of a metro network in the optimization of an urban spatial structure, the panel data of 10 main districts in 2012, 2014, 2016, 2018, and 2020 are selected for the study of Wuhan's metro network. The influence of metro networks on the urban spatial structure is quantified by using urban spatial gravity model and social network analysis. Three indicators-overall network density, centrality, and core-edge are selected to respectively evaluate the connectivity, accessibility, and polycentricity of the spatial structure of the city. The results show that the subway construction increases the spatial connectivity by 25%, the overall accessibility by 30.33%, and the polycentricity by 7.82%. These results demonstrate that the subway construction can significantly improve the connectivity and accessibility of Wuhan's urban spatial structure, especially the accessibility of peripheral districts, but improving polycentricity is weak. This study reveals the mechanism of action and the degree of influence of the metro network construction process on the dynamic optimization of urban spatial structure in Wuhan at different time stages from the perspective of the overall network. It provides a reference for the study of metro networks in similar cities with topographic and geomorphic diversity and enriches the research cases of such cities.
... En este trabajo se ha optado por una visión relacional y de redes (Burt, 1976;Woolcock, 2007) del desempeño de los países, es decir, se considera que existe un beneficio para el desarrollo a partir de la multiplicidad de relaciones entre los países (Bolívar et al., 2019;Cuypers et al., 2020). De esta manera, aparte de los factores típicos requeridos para su desarrollo, un país tiene mayores oportunidades de lograr objetivos de desarrollo en la medida en que puede acceder al intercambio de mercancías, capitales y recursos con sus socios regionales (Kurt & Kurt, 2019;Woolcock & Narayan, 2000). Sobre estas relaciones, desde la teoría del capital social interorganizacional se plantea que la implicación en redes, con sus normas y la confiabilidad que generan, permiten la obtención de beneficios políticos y económicos (Lee, 2009). ...
... Another aspect that is worthy of future consideration is the potentially positive consequences of interaction derived from participation in multiple networks, both formal and informal, inside and outside the STP (local business associations, key customers, and suppliers, etc.) and the unexplored consequences of the weakening or absence of ties in informal networks. Finally, we encourage additional research within and across industries (Kurt and Kurt, 2020). ...
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For innovative SMEs, acquiring knowledge resources may serve as an important source to enhance their knowledge base of management practices. In line with the resource interaction approach, an essential way to do this is to participate in informal interfirm networks. Yet, researchers have only given cursory attention to resource exchange in cooperative networks. This study examines the structural, relational, and motivational drivers that lead firms to establish informal networks of relationships to find, exchange, and combine knowledge resources. Following a mixed methods research design using interview data and social network data, the study demonstrates that informal networks play a pivotal role for SMEs to capture valuable resources increasing their knowledge stock, forge organizational standing, and gain social connectivity through reciprocity. This research implies that knowledge as a resource transcends the individual organization, which offers implications for resource interaction in inter-organizational knowledge networks and management practice.
... With the in-depth application of network analysis methods, complex network analysis has become an emerging trend to study the business cycles synchronization between countries [21,22], and it is also an ideal tool to reveal the topological characteristics of the BCSN [23,24]. Base on the concept of graph theory and complex network theory, countries can be regarded as nodes, the business cycle synchronization linkages of each country can be regarded as the connecting edges of nodes, and thus the BCSN is formed [21]. ...
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Based on the GDP constant 2010 US$ from the World Bank, this paper uses the instantaneous quasi-correlation coefficient to measure the business cycle synchronization linkages among 53 Belt and Road Initiative (BRI) economies from 2000 to 2019, and empirically studies the topological characteristics of the Business Cycle Synchronization Network (BCSN) with the help of complex network analysis method. The main conclusions are as follows: First, the BCSN density and efficiency of BRI economies are still low, and it presents a topological feature of "small world". Second, the individual characteristics of the economies in the network are obviously different. Among them, China's relative influence is significantly increased, but its betweenness centrality level is still low. Third, since the inception of BRI, the topological characteristics of BCSN of BRI economies have undergone great changes, and their topological evolution has gradually reflected the characteristic of self-stability.
International vertical alliances (IVAs) have garnered increasing scholarly interest in the strategy and international business (IB) literature. Our review of 111 papers published in major IB journals from 2000 to 2020 sheds light on the antecedents, key mediators, moderators and outcomes of IVAs. To generate insights, we juxtaposed forward and backward alliances and compared IVAs with their domestic vertical and horizontal counterparts. In this paper, we highlight key areas for future IVA research, including—but not limited to—broadening the scope of the investigation in order to integrate new theories and methods suited to examine such alliances in the IB field.
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Social network analysis is increasingly applied to modeling regional relationships. However, in this scenario, we cannot ignore the geographical economic and technological nature of the relationships. In this study, the tools of social network analysis and the gravity model are combined. Our study is based on the Amadeus database of European organizations, which includes 24 million companies. The ownership of parent subsidiaries was modeled using economic, technological, and geographic factors. Ownership was aggregated to the NUTS 3 regional level, to which average corporate profitability indicators, the GDP per capita characterizing the economic environment, and the number of patents, which is a proxy of the technological environment, were assigned to NUTS 3 regions. The formation of the ownership network between 2010 and 2018 was characterized using this dataset. As the proposed model accurately describes the formation of ownership relationships marked with edges, it is possible to estimate network properties, such as modularity and centrality.
Purpose The purpose of this paper is to identify how the cultural attributes of ethnic networks affect foreign direct investment (FDI) location. Design/methodology/approach The study tests on panel data the effect of ethnic networks in interaction with their member’s cultural attributes on FDI location. Findings Results show that ethnic networks whose members predominantly exhibit a human orientation do not affect FDI location. However, when performance orientation is the predominant cultural attribute of the members of an ethnic network, there is a positive and significant effect on FDI location. Practical implications Managers need to be aware that not all networks will be equally helpful in achieving particular goals. For instance, ethnic networks where the performance orientation is dominant among their members affect FDI location, unlike ethnic networks where human orientation is dominant. Therefore, decision-makers need to identify and align these two elements (networks and goals) to maximize outcomes. Originality/value This study contributes to the literature by suggesting that FDI location is affected by ethnic networks where performance orientation is dominant among the members, which is not the case when human orientation is dominant among the members of the ethnic networks.
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Este artículo obedece a una revisión sistemática de la literatura de las principales áreas de investigación en los Negocios Internacionales en el período 2017-2020. El propósito fue identificar las tendencias de investigación, así como las brechas y oportunidades de estudios e investigación en este campo; para ello se realizó una revisión documental de artículos científicos publicados en revistas especializadas. Los hallazgos proporcionan una descripción del panorama actual de las tendencias en investigación, señalan los temas predominantes en el campo, explican algunos problemas emergentes, las brechas investigativas y perspectivas futuras. La previsión tecnológica, la investigación empresarial, la gestión turística, los negocios, la gestión de marketing industrial, la gestión logística internacional y el desarrollo sostenible fueron temas preponderantes que se identificaron. Con relación a las brechas investigativas, se hallaron temas como marketing digital, métricas innovadoras para medir el desempeño financiero y de marketing sostenible o ecológico, y la aplicación e impacto de técnicas relacionadas con big data en el desempeño empresarial. Sobre los desafíos que enfrenta la investigación regional, se encontró que es necesaria una revisión y estudio de procesos estructurales de desarrollo, competitividad y sostenibilidad y procesos de internacionalización de empresas emprendedoras.
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In this study we examine the effect of matching, a comprehensive networking concept, on the perceived export barriers and export performance of small exporting firms. We introduce matching as a moderating variable affecting the link of perceived internal/external export barriers to export performance. Using a sample of 106 UK-based exporting small and medium enterprises (SMEs), we find that matching alleviates the negative impact of perceived internal export barriers on export performance. Furthermore, the empirical results show that export experience and export commitment reduce managers' perceived internal and external export barriers. The study shows that matching, as a networking-tool at multiple levels, can help to overcome export barriers, thus providing a mechanism to offset challenges opened up through nationalistic policies.
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Purpose This study aims to utilise key insights from social network theory (SNT) to enhance understanding of overcoming the liability of outsidership as a prerequisite for firm internationalization. Specifically, it seeks to examine the influence of structural attributes of networks on the motivational stance of both network insiders and outsiders in relation to overcoming the liability of outsidership. A related aim is to explore the role of network positions of insider actors in terms of its impact on the speed of market entry. Design/methodology/approach The article draws on the extant literatures on firm internationalization, particularly the liability of outsidership, and SNT to identify to what extent SNT can be utilised to deeply understand the process of overcoming the liability of outsidership. We put forward eight propositions linking structural and positioning attributes of networks with overcoming the liability of outsidership. Findings SNT provides strong potential for a more comprehensive understanding of the internationalization phenomena through shedding light on the inter-relationship between the liability of foreignness and the liability of outsidership. The paper demonstrates that while the cost of overcoming the liability of outsidership is higher in closed target network as compared to open networks, the expected benefits of an insider position in closed or open network is affected by the outsider firm’s perception of the liability of foreignness in the market it wishes to enter. Considering the differential enabling characteristics of closed and open network in terms of facilitating tacit knowledge sharing as opposed to explicit information flows, we reveal that liability of foreignness operates as a negative moderator for the relationship between network structure and the willingness of the outsider to invest in gaining insidership. The analysis of the paper also shows that the positional attributes of the network insider are relevant in outsiders’ motivation in terms of the speed of market entry that they seek to achieve. Originality/value This study theoretically contributes to the internationalization research through integrating SNT with the liability of outsidership understanding of firm internationalization. This is a timely attempt as no systematic application of the conceptual apparatus of SNT in the internationalization research context has been studied. It adds a more coherent inside-out perspective into the overcoming the liability of outsidership discussion which has been extensively dominated by an outside-in perspective.
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Global value chain (GVC) governance is an established field within international business research, yet the relational aspects of GVCs have, to date, garnered less scholarly attention than have efficiency considerations. This conceptual study’s objective is to explore the relational dynamics of GVC governance using an internalization theory perspective, and by linking GVC research with insights from the business network literature. GVCs are argued to be a distinct form of asymmetrical networks, associated with economizing and capability creation features, as well as costs. The orchestrating firm can thus enhance efficiency outcomes of the GVC using social mechanisms similar to those adopted by core actors in a business network. In the study, six such mechanisms were identified: (1) selectivity, (2) inclusion of non-business intermediaries, (3) joint strategizing, (4) relational capital, (5) multilateral feedback, and (6) rules for equitable value distribution. While safeguarding the GVC’s efficiency, the above social mechanisms are associated with challenges and limitations, and therefore do not guarantee international competitive success. However, deployed in an integrative fashion, these social mechanisms facilitate coordination (thus economizing on bounded rationality), reduce the hazards of imperfect effort by partners (thus economizing on bounded reliability), and foster innovation and new capability development.
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As modern organizations become increasingly knowledge intensive, collective turnover, a phenomenon of knowledge spillover or transfer, is gradually receiving greater attention from scholars. Given that most studies have focused on the detrimental organizational consequences of collective turnover, this paper proposes a relational perspective to explore three distinct process models of dispersed, translocated, and entrepreneurial collective turnover. Based on a causal mapping analysis conducted in China of 25 collective turnover events that can demonstrate complex turnover processes over time, this study found that dispersed collective turnover, in which a group of members quit and scatter, is more likely to be triggered by shared job dissatisfaction. While translocated collective turnover, in which organizational members collectively mobilize in the same organization, is highly associated with attractive external lures. In contrast, entrepreneurial collective turnover, in which a group of members leave to start a new business together, is developed through a group process of entrepreneurial passion contagion. The ensuing triple-pathway model helps to enrich the theoretical understanding of collective turnover by clarifying the contextual differences regarding the effects of turnover destination on the important process of collective turnover.
In much of the current literature on supply chain management, supply networks are recognized as a system. In this paper, we take this observation to the next level by arguing the need to recognize supply networks as a complex adaptive system (CAS). We propose that many supply networks emerge rather than result from purposeful design by a singular entity. Most supply chain management literature emphasizes negative feedback for purposes of control; however, the emergent patterns in a supply network can much better be managed through positive feedback, which allows for autonomous action. Imposing too much control detracts from innovation and flexibility; conversely, allowing too much emergence can undermine managerial predictability and work routines. Therefore, when managing supply networks, managers must appropriately balance how much to control and how much to let emerge.
Foreign Direct Investment (FDI) research has usually focused on inward and outward levels of assets flows and stocks, yet very few studies have examined the Global FDI Network. We study the economic performance of countries in terms of their associations with certain FDI partners employing social network analysis. This new approach shifts the focus away from the study of certain country features and their influence on FDI stock levels. Our study of FDI stocks from 229 economies sheds light on the interactions of the global FDI network within its singular context of country-level determinants, its after-effects, internal patterns, and relationship with the network of Bilateral Investment Treaties (BITs). Our conclusion is that country features such as size, openness, skill levels, and institutional stability not only set the pace of FDI, but that they also influence both the network structure and the power positions of each node. We investigate whether that structure responds to homophilic relations between countries or to core–periphery patterns with only a few core economies and we question the strategy of signing BITs to form FDI relations. Finally, we inquire into strategic connections with powerful partners, to ascertain whether they provide beneficial settings for country growth and trade performance.
We investigate the theoretical and empirical implications of internationalization as a multidimensional and multilevel construct and its relationship to the renewal capability of the firm. Theoretically, internationalization describes a diverse range of cross-border activities by the multinational enterprise (MNE), and thus carries with it multiple dimensions of depth, breadth, and speed. Empirically, internationalization contains both within- and between-MNE variance, each with potentially different effects on the MNE’s renewal capability. Using a unique, longitudinal dataset of 94 MNEs, we find support that each dimension and level of internationalization relates differently to the renewal capability of the MNE. At the within-level, the MNE internationalization breadth is negatively related to the its renewal capability, yet internationalization speed is positively related to renewal. At the between-level, the depth of internationalization is positively related to the MNE’s renewal capability. In concert, our results suggest that the effects of internationalization on important outcomes cannot be simplified into general relationships. Rather, attention to the nuances of internationalization, especially as related to the MNE’s capabilities, is needed.
In today’s knowledge economy, clusters are a key driver of a country’s competitiveness. Yet a cluster’s technological base is now more than ever influenced by constituent firms’ actions to tap into distant knowledge sources. Drawing on a social network perspective, and distinguishing between horizontal versus vertical organization-based linkages, we explore the effects of a cluster’s connectedness to foreign locations on its innovation performance. We show that improvements in horizontal and vertical connectedness both stimulate a cluster’s innovation performance, but that their relative effects vary across cluster types. Innovation in knowledge-intensive clusters disproportionately benefits from enhancements in their constituent firms’ horizontal connectedness to foreign knowledge hotspots. Innovation in labor-intensive clusters mostly gains from stronger vertical connections by their firms to central value chain players abroad. We discuss the implications of our findings for research on global knowledge sourcing and cluster upgrading.
In this article, we review critiques of international business (IB) research with a focus on whether IB scholarship tackles “big questions.” We identify three major areas where IB scholars have addressed important global phenomena, but find that they have had little influence outside of IB, and only limited effects on business or government policy. We propose a redirection of IB research towards “grand challenges” in global business and the use of interdisciplinary research methods, multilevel approaches, and phenomena-driven perspectives to address those questions. We argue that IB can play a more constructive and vital role by tackling expansive topics at the business–societal interface.