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1 – 2 of 2Sangho Chae, Byung-Gak Son, Tingting Yan and Yang S. Yang
This study investigates the extent to which structural equivalence between acquiring and target firms is associated with post-merger and acquisition (M&A) performance—a…
Abstract
Purpose
This study investigates the extent to which structural equivalence between acquiring and target firms is associated with post-merger and acquisition (M&A) performance—a relationship that is proposed to be moderated by industry-level vertical relatedness between acquiring and target firms.
Design/methodology/approach
Applying social network analysis and regression, this study analyzes a buyer–supplier relationship network dataset of 279 M&A deals completed between 2010 and 2017 to test the hypotheses. Structural equivalence is measured as the proportion of common customers and suppliers between an acquiring firm and a target firm.
Findings
Supporting a view about the importance of supply chains in explaining M&As outcomes, the results suggest that the structural equivalence in the supplier network is positively associated with post-M&A firm performance. The results also show that the effect of the structural equivalence in the customer network is moderated by vertical relatedness between two merging firms (i.e. structural equivalence contributes to post-M&A performance when vertical industry relatedness is high).
Originality/value
This study contributes to the M&A and supply network literature by investigating the performance implications of structural equivalence in supplier and customer networks, demonstrating the importance of taking a supply chain view when explaining M&As outcomes. Specifically, the authors suggest considering structural equivalence as a new type of relatedness between merging firms (i.e. relatedness in network resources in explaining post-M&A performance). It also indicates how industry-level vertical resource relatedness, which is about relatedness in internal resources between the two firms, could interact with firm-level network resource relatedness, which is about relatedness in external supply chain resources between the two firms, in affecting post-M&A performance.
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Byung-Gak Son, Sangho Chae and Canan Kocabasoglu-Hillmer
Catastrophic supply chain disruptions can significantly damage the operational and financial performance of firms. While a growing body of literature on supply network structures…
Abstract
Purpose
Catastrophic supply chain disruptions can significantly damage the operational and financial performance of firms. While a growing body of literature on supply network structures has studied what influences supply networks' vulnerability to supply chain disruptions and capability to recover from them, it remains unclear how supply network structures change after major supply chain disruptions. We aim to provide an understanding of how these changes occur.
Design/methodology/approach
Using a natural experiment approach and supply network data from Factset, this study investigates how firms' supply network structures change after experiencing the catastrophic supply chain disruptions caused by the 2011 Tohoku earthquake and tsunami in Japan. We capture post-earthquake supply network changes using the measures of degree centrality and ego network density.
Findings
The results of the analysis suggest that compared to unaffected firms, the affected firms experience changes in their supply network structures tending toward lower complexity measured by in-degree centrality, out-degree centrality and ego network density.
Originality/value
This study contributes to social network theory and the complex adaptive supply network literature by providing empirical evidence of structural changes in supply networks after catastrophic supply chain disruptions. A managerial contribution is made by providing a reflection on why these changes might be occurring and alert firms to the challenges of managing complexity in their supply networks.
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