Knowledge spillover in corporate financing networks : embeddedness and the firm's debt performance
By: UZZI, Brian
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Contributor(s): GILLESPIE, James J
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Material type: ![materialTypeLabel](/opac-tmpl/lib/famfamfam/AR.png)
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Item type | Current location | Collection | Call number | Status | Date due | Barcode |
---|---|---|---|---|---|---|
Periódico | Biblioteca Graciliano Ramos | Periódico | Not for loan |
Building on social embeddedness theory, we examine how the comptencies and resources of one corporate actor in a network are transferred to another actor that uses them to enhance transactions with a third actor - a strategic process we dub `network transitivity'. Focusing on the properties of networktransitivity in the context of small-firm corporate finance, we consider how embedded relations between a firm and its banks facilitate the firm's access to distinctive capabilities that enable it to strategically manage its trade-credit financing relationships. We apply theory and original case-study fiedwork to explore the types of resources and competencies available through bank-firm relationships and to derive hypotheses about how embedded bank-firm relatioships affect the strategy of small-to medium-sized firms. Using a separate large-scale data set, we then test the generalizability of our hypotheses. Our qualitative analyses show that embedded bank-firm tie provide special governance arrangements that facilitate the firm's access to bank-centered informational and capital resources, which uniquely enhance the firm's ability to manage trade credit. Consistent with our arguments, our statistical analyses show that small-to medium-sized firms with embedded ties to their bankers were more likely to take lucrative early-payment penalties than were similar firms that lacked embedded ties-suggesting that social embeddedness beneficially affects the financial peformance of the firm
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