Enhancing Firm Value through Technology Provider Networks: A Social Network Analysis Approach

Purpose -This study explores how technology provider-based networks influence firm value in the technology sector. It focuses on how indirect connections via shared technology providers affect strategic positioning, resource access, and market influence, with an emphasis on regions like the US and Western Europe. Design/methodology/approach -The study introduces a network model linking firms through shared technology providers. This network is projected into a one-mode firm network to capture indirect relationships. Social Network Analysis (SNA) techniques, including centrality measures and network cohesion indicators, are applied to assess firms' strategic positioning. Regression analysis using data from 19,186 technology firms evaluates the influence of network metrics on firm value. Findings -The results show that firms with higher degree and eigenvector centrality achieve greater value, benefiting from enhanced access to resources and market influence. Network cohesion, represented by interconnected groups, significantly boosts firm value by fostering collaboration and trust. Conversely, high hub and authority scores can negatively impact firm value due to increased complexity. The findings highlight the importance of indirect network connections in shaping firm competitiveness. Originality/value -This study presents a novel technology provider-based network model, contrasting with traditional models that emphasize direct relationships. By focusing on shared technology providers, the research reveals the strategic impact of indirect connections within the technology ecosystem. The findings provide a framework for using social network analysis to optimize firm value, offering insights for businesses aiming to enhance network strategies.