Keep your friends close and your enemies closer? the influence of enterprise social capacity

Abstract

This paper examines effects of enterprise social capacity on firm collaboration, competition and performance from a social network perspective. Data used in this paper is obtained from various data sources, including Compustat, SDC platform and six leading computing journals (Networkworld, Infoworld, Computerworld, InformationWeek, eWeek and eWeek Security Watch). Data consists of industrial fundamentals and necessary competition and collaboration information from 266 firms in various industries ranging from 2004 to 2011. We use Generalized Method of Moments (GMM) estimators to fit our data. We take care of the possible endogeneity nature of panel data by applying GMM model and selecting effective instrumental variables. Result shows enterprise social capacity and positively influence firm performance. Furthermore, social capacity does not have a statistically significant moderating effect of firm collaboration on firm performance. Interestingly, enterprise social capacity has a negative interaction effect on firm competition on firm performance.