An Empirical Study on the Relationship between Leadership of Hub-firms and the Efficiency of a Firm Network

Since the past decade, firm networks are becoming an attractive strategic option, efficiency of firm networks is receiving an increasing attention. Many researches focus on relationship between contract mechanisms and efficiency of firm networks. However, relationship between leadership of hub-firm and efficiency of firm networks is empirically largely unknown. This research investigates the relationship between leadership of hub-firm and efficiency of firm networks in China, although some previous studies examined them in hierarchy organizations. In the survey, 4 latent variables and 22 observed variables are conducted in structural equation model (SEM). It finds that leadership of hub-firm significantly contributes to trust and stable cooperation with partners, and stable cooperation is a mediator between leadership of hub-firm and efficiency of firm networks. Furthermore, the implications for alliance managers are also discussed.