Social networks, connection disruptions, export value and resilience

Liang, Jingjing (2023) Social networks, connection disruptions, export value and resilience. PhD thesis, Birkbeck, University of London.

Abstract

This 3-paper format PhD thesis explores links between social networks and export. All three papers are based on social network theory and empirically test the interactions between social networks and export using quantitative analysis. Specifically, Chapter 2 investigates the relationship between export value and network centrality. It argues that export value can reduce network centrality due to: (1) product specialization enhancement and (2) product quality upgrade. This argument is tested by applying mediational models and the impact of export value on network centrality is significantly negative in all cases, suggesting that exporters occupy a less prominent status in their local social network after being more international. This study sheds new light on the gap between social network theory and business facts by considering the adjustment of firms’ production decisions. Chapter 3 assesses the effect of preferential trade agreement (PTA) networks on export resilience. It firstly puts forward a new concept of export resilience which determines sustainable export growth. It then uses social network theory to argue that PTA networks can negatively influence export resilience by (1) creating reciprocal pressures and hence unproductive reciprocity costs and (2) transferring risk and hence losses from other network members. Empirical evidence from two studies, one at the country level, and the other at the firm level, supports our argument. This study contributes to the international business literature and social network theory by applying social network theory to explain the counter-intuitively negative relationship between PTA networks and export resilience. Chapter 4 examines the causal effects of political connection disruptions on export value. Political connection disruptions can positively affect export because firms take proactive strategic responses, using export to substitute the shrinking domestic sales to neutralize the damage induced by political network disruptions. This study uses a difference-in-differences design to isolate the effects of political connections. Empirical evidence from publicly listed Chinese export firms supports the arguments. This study enriches the social network theory literature by probing political connectedness and the alternative resources within the interlocked networks.

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