The Impact of Social Networks on Inter-Organizational Effectiveness: The Case of IPO Deal Networks

The question for the effectiveness of inter-organizational collaboration gains much attraction in the light of social network analysis. We analyze this by the case of Initial Public Offering (IPO) deal networks as this is a valuable example for the repeated collaboration of autonomous organizations on a shared goal and data is publicly available. We use the social networks established through deal activities over time as independent variables explaining the success of the IPO. Although we did not find statistically significant support for the impact of centrality for neither the lead manager nor the consortium banks, we see that the clustering among the consortium banks is a significant driver for IPO success. The higher the clustering amongst the collaborating consortium banks the better the performance of the issued share. We thereby provide initial evidence for the influence of network structure on IPO success and show that the build-up of the consortium has a significant impact on the success of the IPO. In terms of methodology, we explore a way of constructing networks from previous collaborations which form the basis for proven analysis techniques and might help to shed light on various questions in the domain of inter-organizational collaboration.