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Benefiting from Networks by Occupying Central Positions: An Empirical Study of the Taiwan Health Care Industry

Peng, Tzu-Ju Ann; Lo, Fang-Yi; Lin, Chin-Shien; Yu, Chwo-Ming Joseph


Abstract: At issue is whether network resources imply some resources available to all members in networks or available only to those occupying structurally central positions in networks. In this article, two conceptual models, the additive and interaction models of the firm, are empirically tested regarding the impact of hospital resources, network resources, and centrality on hospital performance in the Taiwan health care industry. The results demonstrate that: (1) in the additive model, hospital resources and centrality independently affect performance, whereas network resources do not; and (2) no evidence supports the interaction effect of centrality and resources on performance. Based on our findings in Taiwanese practices, the extent to which the resources are acquired externally from networks, we suggest that while adopting interorganizational strategies, hospitals should clearly identify those important resources that reside in-house and those transferred from network partners. How hospitals access resources from central positions is more important than what network resources can hospitals acquire from networks. Hospitals should improve performance by exploiting its in-house resources rather than obtaining network resources externally. In addition, hospitals should not only invest in hospital resources for better performance but should also move to central positions in networks to benefit from collaborations.

Tzu-Ju Ann Peng, PhD, is Associate Professor, Department of Business Administration, Providence University, Taiwan, and Visiting Research Fellow, Centre for Business Performance, School of Management, Cranfield University, UK. E-mail:,

Fang-Yi Lo, MBA, is Doctoral Student, Department of Business Administration, National Chenchi University, Taipei, Taiwan. E-mail:

Chin-Shien Lin, PhD, is Professor, Department of Business Administration, National Chung Hsing University, Taichung, Taiwan. E-mail:

Chwo-Ming Joseph Yu, PhD, is Professor, Department of Business Administration, National Chenchi University, Taipei, Taiwan. E-mail:

© 2006 Lippincott Williams & Wilkins, Inc.