Strategizing in investment banking network

Purpose – The purpose of this paper is to investigate how network position can influence performance of firms and how firm‐specific characteristics can mediate this relation by asking: “Does network position influence performance of its members?” and “How could specialization choices influence this network position‐performance relation?” Design/methodology/approach – These aspects are examined by studying network position and specialization of actors operating in the investment banking industry in the Euro area, using data on all 279 underwriting syndicates formed during the years 2003‐2005. Data were pooled across actors and across these three years and the resulting sample had a total of 534 observations. Findings – Results highlight that actors operating in the investment banking industry enhance performance by having a central position in their network and that specialization reduces the benefits of having a central position in the network. Practical implications – The findings suggest that managers need to assess a firm's ability to get knowledge and information from its external environment in order to make adjustments based on firm alliance portfolios. Originality/value – This paper uniquely contributes to the strategic management literature showing that the effect of a particular network position on performance depends on firm‐level characteristics.