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Performance feedback as a determinant of ego-network stability in collaboration networks

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Abstract

Collaboration networks are not intrinsically unstable and fragile, ego-network stability cannot be taken for granted. Extant research has highlighted the determinants of ego-network stability; nevertheless, it is still unclear how behavioral factors affect a firm’s ego-network stability in a collaboration network as a consequence of a decision-maker’s bounded rationality. Drawing from the behavioral theory of the firm and attention-based view, this paper explores how ego-network stability is affected by performance feedback and investigates the influence of CEOs’ information advantage and power on firms’ responses to performance feedback. Using longitudinal data on Chinese publicly listed firms in the pharmaceutical industry from 2007 to 2020, we find that the magnitude of a firm’s outperformance relative to its aspirations harms its ego-network stability. The magnitude of a firm’s underperformance relative to its aspirations has a U-shaped relationship with its ego-network stability. Moreover, CEOs’ social capital and power strengthen the negative relationship between the magnitude of a firm’s outperformance relative to its aspirations and its ego-network stability, and CEOs’ social capital flattens the U-shaped effect of the magnitude of a firm’s underperformance relative to its aspirations on its ego-network stability.

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Data Availability

The datasets generated and analysed during the current study are available from the corresponding author on reasonable request.

Notes

  1. Jointown Pharmaceutical Group Co., Ltd. is a leading listed company (securities code: 600,998) in the pharmaceutical industry in China. Huawei Technologies and Kingdee are global providers of cloud services, communications technology, etc.

  2. The pharmaceutical industry is identified by the industry code (2012 edition) issued by China Securities Regulatory Commission.

  3. The searching terms for pharmaceutical industry in the DII database are shown in Appendix.

  4. The firms under “Special Treatment” (i.e., firms labeled with “ST” or “*ST”) in the samples are excluded.

  5. For the board of directors whose individual information are doubtful, we further referred to the director's resume to determine uniqueness.

  6. The IPC code is a valid proxy for a technology class, we adopted the four-digit version of patents’ IPC codes to represent a firm’s technology classes.

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Acknowledgements

This work is supported by the National Natural Science Foundation of China (71871182; 72101274; 72271143), General Program of Humanities and Social Sciences Research of Ministry of Education of China (22YJC630134), Natural Science Foundation of Shaanxi Province of China (2023-JC-QN-0787), Natural Science Foundation of Hunan Province of China (2022JJ40646), Social Science Foundation of Hunan Province of China (20YBQ104).

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  1. School of Management, Shandong University, Jinan, People’s Republic of China

    Jingbei Wang

  2. School of Management, Northwestern Polytechnical University, Xi’an, People’s Republic of China

    Yafei Nie

  3. School of Economics and Management, , Xi’an University of Posts and Telecommunications, Xi’an, China

    Min Guo

  4. School of Business, Central South University, Changsha, People’s Republic of China

    Hui Liu

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Appendix

Appendix

Searching sets: Pharmaceutical industry

Searching terms: TS = (pharma* OR drug OR (medicine OR medication OR medicinal OR medicant) OR peptide OR protein OR antibody OR vaccine OR ‘‘nucleic acid’’ OR ‘‘ascorbic acid’’ OR ‘‘acrylic acid’’ OR ‘‘stem cell’’ OR nucleotide OR ribotide OR enzyme OR serum OR antibiotic OR interferon OR inhibitor OR oligonucleotides OR (‘‘coagulation agent’’ OR coagulant) OR (‘‘crosslinking agent’’ OR crosslinker) OR cytotoxicity OR immunoassay OR glucose OR ‘‘single-molecule’’ OR ‘‘layered double hydroxides’’ OR ‘‘alpha-cyclodextrin’’ OR ‘‘titanium-dioxide films’’ OR ‘‘cadmium-sulfideor’’ OR copolymers OR ‘‘glucose-oxidase’’ OR ‘‘anatase TiO2’’ OR ‘‘beta-cyclodextrin’’ OR Solgel OR ‘‘TiO2 films’’ OR ‘‘nanocrystalline tio2’’ OR ‘‘acrylamide’’ OR ‘‘fluorescence probes’’ OR ‘‘paste electrodes’’ OR ‘‘triton x-100’’ OR oxidase OR ‘‘horseradish-peroxidase’’ OR ‘‘DNA hybridization’’)

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Wang, J., Nie, Y., Guo, M. et al. Performance feedback as a determinant of ego-network stability in collaboration networks. Asia Pac J Manag (2023). https://doi.org/10.1007/s10490-023-09872-x

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