Description: Department Seminar: Jing Cai (University of Maryland)

Location: 368A Heady Hall

Contact Person: David Hennessy

Title: Effect of Referring Business Partners on Firm Networks and Performance

Abstract:  We use a field experiment in China to evaluate the impact of referring business partners on firm networks and performance. We find that referrals created new partnerships, which partially crowded out existing partnerships but on net increased the interconnectedness of the supplier network. Moreover, access to new partners significantly improved performance, satisfaction with partners, and product quality. These results indicate that search frictions in firm-to-firm networks appear to be an important growth barrier.