Designing an Institutional Investor's Collaborative Network : A Case Study of Value Network Analysis

As elaborated in our paper — Social Capital and Building an Institutional Investor's Collaborative Network — a new “collaborative” model of investing lies at the heart of our re-intermediation thesis, and this model is premised upon institutional investors forming broad and deep relationships with investment partners to build their social capital. In this paper, we aim to provide practical guidance for an ego investor to maximize the effectiveness and efficiency of its collaboration strategy, by developing a generic model for the collaborative investment network, using the results from a rigorous value network analysis. Specifically, our model shows the great potential of value network analysis in managing the complexity and uncertainty of exchange activities between institutional investors for multiple types of resources as well as enhancing the dynamic capabilities of institutional investors by providing them a transparent, collaborative, and live platform to continuously and consistently learn from the past and quickly adapt to the internal and external changes in a networked environment. Further, our next goals include extending the level of value network analysis from an ego investor to the whole network, studying the longitudinal evolution of a collaborative investment network, as well as minimizing the potential moral hazard, free-riding, and other social dilemmas associated with the implementation of collaboration strategy