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Abstract:
User-driven innovation initiatives enabled by virtual social networks are gaining importance in modern business contexts. For example, the open source software development movement employs an online network whose members collaborate to develop software. In this user-network-driven innovation context, the product development process consists of two stages: (1) transition from an idea to initiating product development activity and (2) maturation of the projects to become marketable. The network structure that surrounds a project at inception (i.e., birth or founding) should play a significant role in determining which projects become active (stage 1) and influencing the time to market for those active projects (stage 2). The authors test their hypotheses with data from 817 new open source projects from SourceForge.net, the largest forum for open source projects. Projects whose founders are embedded in the network and whose positions enable them to arbitrate connections among projects are more likely to become active and experience shorter times to market. The findings have significant implications for understanding and managing the product development process in a networked environment.

social networks, open source, product development, innovation, type II tobit, social capital, embeddedness, structural holes, community

Abstract:
With the electronic sales channels (i.e., electronic markets) becoming viable alternatives to traditional sales channels, firms interact and transact in these channels and, as a result, develop virtual interfirm relationships, i.e., interfirm relationships that are formed and managed primarily through electronic medium. A firm's participation in the electronic channel depends on its psychological and financial investments in the channel. These investments determine the nature of participation in the channel (which we characterize as the firm being an expert, an explorer, or a passive firm in the electronic channel) and, as a result, the nature of the virtual interfirm relationships the firm develops in the channel. As dependence structures (i.e., a firm's dependence on its partner and the partner's dependence on the firm) form the bedrock of all interfirm relationships and influence relational outcomes; to understand virtual interfirm relationships, we study the moderating role of the nature of firm participation in the electronic channel on the influence of dependence structures on relational outcomes for virtual interfirm relationships. With survey data from firms participating in an electronic market, we use multi-group structural equation modeling to examine the influence of dependence structures on relational outcomes of trust and satisfaction across three levels of firm participation (expert, explorer, and passive firms) in an electronic market. The results support the theoretical conjectures and suggest that the nature of participation in an electronic market moderates the effect of dependence structures on relationship outcomes of trust and satisfaction.

interfirm relationships, dependence structures, response surface analysis, multi-group structural equation model

Abstract:
Dependence structures, including organizational dependence on its partner and the partner's dependence on the firm, provide basic building blocks for interfirm relationships and influence important relational outcomes. Building on extant literature, the authors recognize heterogeneity in the translation of dependence structures into relational outcomes (in statistical terms, the pattern and value of regression coefficients varies across latent regimes) and propose a rudimentary interfirm relational typology to capture this heterogeneity. The typology recognizes three types of interfirm relationships in which dependence structures influence relational outcomes: (1) the parity doctrine form, such that the effects of dependence on relational outcomes are symmetric; (2) the hierarchical linkage form, in which only one firm's dependence is critical; and (3) the interdependence interplay form, in which the dependence of the two firms has unique effects on relational outcomes. To model the relational typology empirically, the authors propose a confirmatory latent-class structural equation modeling framework, in which the influence of dependence structures varies according to the rudimentary relational typology. Results from an analysis of survey data from U.S. subsidiaries of Japanese and German multinational corporations on their marketing channel relationships support the structure of the proposed relational typology.

Interfirm, strategy, SEM, unobserved heterogeneity