Effects of participation in standardization on firm performance from a network perspective

Abstract

A technical standards alliance (TSA) is a collection of firms organized for a common goal: developing, revising, and promoting technical standards. A firm may participate in standardization through one or more TSAs: its TSA network. However, little is known about the influencing factors and their boundary conditions for gaining firm-level benefits from such involvement. This study fills this gap. Drawing on a network perspective on standardization, we examine the effect of the firm's TSA network and its absorptive capacity. Using a sample of 437 Chinese IT and automotive industry firms participating in non-governmental Chinese standardization groups, we find positive impacts of participation. A firm's central position and relationship strength within a TSA network positively affect firm performance, and absorptive capacity contributes to this effect. Environmental uncertainty acts as a moderator in the relationship between absorptive capacity and firm performance. These findings add to the literature on the impacts of standardization and are informative for companies that consider participating in standardization.