Title: Interfirm relationship analysis for dynamic and dual-view company networks: A latent space modeling approach
Authors: Ka Chung Ng - The Hong Kong University of Science and Technology (Hong Kong) [presenting]
Mike So - The Hong Kong University of Science and Technology (Hong Kong)
Kar Yan Tam - Hong Kong University of Science and Technology (Hong Kong)
Abstract: Interfirm relationships are crucial to our understanding of firms' collective and interactive behavior. They have many business implications that help firms improve performance and governance. Toward this end, we propose a latent space approach to model temporal change in interfirm relationships, from a dynamic and dual-view company network, which is still under-researched in the literature. We assume that the probability of a link between firms depends only on a underlying latent space; firms that are close to each other in the latent space are more likely to develop a linkage. We expect to make four contributions: 1) three insightful business measures, business proximity, business reach and business attraction, are proposed to assist the analysis of interfirm relationship; 2) the latent space approach is extended to handle duel-view and dynamic networks in an integrated manner that is seldom addressed in the literature; 3) complex dynamic interfirm relationships are parsimoniously visualized and traced in a clear and interpretable way to help reduce cognitive load when making decision; 4) firms' relatedness and similarity are quantified, which can support managerial decision-making, portfolio management and private firm valuation.