Corporate Social Network And Firm Performance

Corporate Social network is the collection of the social relationship between enterprise and outside, it is one of the crucial non-economic factors influence enterprise behavior, many Scholars had deep research in this field. Corporate Social network is a contingency factor that means Corporate Social network may have positive or negative effect to the firm performances in different external environment and network structure. But this contingency had not been deeply researched, the dark side of corporate Social network and the situational variables that influence the corporate social network effect had often been ignored. Through the study of ownership structure theory and corporate Social network theory, we define the ownership concentration degree as an important situational variable that shape the corporate social network mechanism. This paper focuses on two problems:first is what is the exactly relationship between the corporate social network and firm performance and can the negative effect of corporate social network be ignored? Second is will the difference of the corporate governance structure influence the corporate social network effect to firm performance? Will the concentrated ownership structure and dispersed ownership structure produce different corporate social network effect?On the research content, this paper reexamines the relationship between the corporate social network and firm performance, and points out that the corporate social network functioning can produce corporate social capital, also can produce corporate social liability. From these two angles, respectively, we research the positive and negative role of mechanisms with the corporate social network on firm performance, and how the concentration of ownership shapes the relationship of the corporate social network and firm performance. Relative to the dispersed ownership structure, under the concentrated ownership structure, the shareholders have a higher incentive and supervisory ability, managers in concentrated ownership structure will tend to make full use of information benefits and control benefits bring by corporate social network, so as to create a better firm performance. When the ownership is relatively dispersed, the shareholders have a lower incentive and supervisory ability; managements are easy to collude with opportunist in the network, using the legal loopholes to attack the interests of the corporate. So we think the relationship between corporate social network and firm performance alters as the corporate ownership concentration does.This article selects387manufacturing enterprises from the Shanghai A share market as samples, selecting enterpriser longitudinal social contact, enterpriser transverse social contact and corporate social contact to represent the corporate social network, to compound corporate social network factor with this three dimension through factor analysis. The empirical study shows that, corporate social network and firm performance is negatively related, namely the corporate social network in the actual operation more performance for the corporate social liability. Ownership concentration has positive regulatory effect to the relationship between corporate social network and firm performance. When the ownership concentration degree is high, the effect of corporate social network on firm performance tends to be positive. This study expands the corporate social network and firm performance research model, highlights the situational variables of the corporate social network, reveal the important role of ownership concentration in the corporate social network effect.