How to Improve Sustainable Competitive Advantage from the Distributor and the Supplier Networks: Evidence from the Paper-Making Industry in China

Abstract

Confronted with urgent green requirements from customers and government, firms in high pollution and high resource-consuming industries must make changes and adopt green strategies as well as knowledge-management strategies to develop and sell green products to improve sustainable competitive advantage. To study how to leverage social networks to improve sustainable competitive advantage, our article sheds light on the effects of structural holes in the distributor network as well as in the supplier network and explores how mutual trust could moderate the impact of structural holes in both networks. Based on data from 122 matched pairs of suppliers and distributors of a high-pollution and high-resource-consuming industry, the Chinese paper-making industry, our empirical results demonstrate the positive effects of structural holes in the distributor and the supplier networks on the distributor sustainable competitive advantage. In addition, mutual trust could negatively moderate the relationship between structural holes in the distributor network and the distributor sustainable competitive advantage, but would positively moderate the relationship between structural holes in the supplier network and the distributor sustainable competitive advantage.

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