The Role of International Business Networks in Facilitating Cross-Border Collaboration

Abstract

International business networks have been found as infrastructures that help organizations to operate successfully within cross-border environments, share knowledge, and form collaborations. This study aims to investigate the role of international business networks in fostering cross-border collaboration through an analysis of 156 firms involved in international business networks located in 42 countries of the Asia-Pacific region, Europe, North America, and emerging markets. It is observed that involvement in international business networks helps firms engage in cross-border collaboration more often by 67 %, facilitates their ability to innovate through knowledge transfer by 52 %, and increases market entry success rates by 41 %. In addition, this paper finds three key network characteristics that affect the collaboration results positively: network structural density and connectivity, trust-building activities, and access to diverse knowledge resources. Moreover, the research indicates the importance of certain complementary capabilities that can help firms to benefit from being involved in international business networks, such as cultural intelligence, relationship management skills, and absorptive capacity for external knowledge. The study makes an important contribution to international business studies as this deepen the knowledge regarding the role of network structure in facilitating knowledge exchange, lowering transaction costs, and facilitating resource sharing across borders. This paper proposes a unified model that views international business networks as complex ecosystems in which firms both compete and collaborate with each other, gain benefits due to network externalities, and achieve competitive advantage through innovation within collaborative networks.