Social capital and competitive behavior: A study of interfirm networks and rivalry among automakers

This paper explores how the differential access to network resources influences firms' competitive behavior in the automobile industry. Specifically, we explore how the capability of firms to compete with a greater number and variety of competitive actions is influenced by the changes in the access to both the structural and relational aspects of social capital. The structural aspect of the social capital is depicted by the network centrality and structural autonomy of the firms in the network, whereas the relational aspect is approximated by the functional variety of the alliance types (e.g., R&D, marketing, manufacturing, finance, distribution, etc.). Our empirical investigation showed that the diversity of the alliance types is positively related to the firms' ability to compete more intensively and with a wide variety of action types. Our findings suggest that it is the diversity and the non-redundancy of the ties with network partners (rather than the total number of alliances) that are most critical for an automaker's ability to out-compete rivals.