High-Risk and Low-Risk Cooperative Exchanges and Perceived Benefits in Formal Business Networks

Author:

Besser Terry L.,Miller Nancy J.

Abstract

In spite of the vast literature on the benefits of networks to business success, little is known about the impact of membership of traditional kinds of formal business networks. Using a relatively large sample of US industrial associations and community business networks, the authors examine the relationship between trust, two kinds of cooperative exchanges and perceived benefits from network membership. They test propositions from social capital and institutional theory regarding the role of structural and relational network features on trust levels. The findings reveal generally high levels of trust and moderate levels of low-risk cooperation, but low levels of high-risk cooperation and low reported benefits of membership. Support is provided for social capital theory. Network structural features are not related to trust, but may indirectly impact on it through relationships that are strongly associated with trust. This analysis suggests that networks may be advised to specialize in one or the other kind of cooperative exchange and obtain the corresponding benefits. Tailoring the types of cooperative exchange encouraged in a network to the benefits desired could make these traditional kinds of networks more useful as mechanisms for business success.

Publisher

SAGE Publications

Subject

Management of Technology and Innovation,Business and International Management

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