Leveraging Alliance Networks through Information Technology: Evidence from Panel Regressions

Despite the expectation that Information Technology (IT) is valuable in managing and leveraging multiple alliance relationships and the resultant alliance networks, a paucity in theoretical and empirical examination persists in the literature. Employing social network analysis (SNA), we examined whether IT investment moderates the effect exerted by a firm’s structural properties in alliance networks (direct partners, indirect partners, and structural holes) on its performance. Drawing upon previous research on dynamic capabilities and the knowledge-based view of the firm, we propose a conceptual model and discuss a potential underlying mechanism. Our empirical analysis of 306 U.S. public firms, which provide 971 observations during an 8-year span from 1998 to 2005, suggests that IT investment helps firms to (1) manage the burden of increasing complexity in coordinating multiple alliances, and (2) overcome the relative informational disadvantage resulted from their limited access to indirect partners and structural holes.