Triadic embeddedness, sources of relational rents, and interfirm performance

Abstract

Interorganizational research has largely ignored how dyadic relationships are embedded in a wider network context. Responding to this research gap, we study how triadic embeddedness – cooperating firms structurally and mutually embedded in a network of triads – affects the sources of relational rents and interfirm performance. Using a unique combination of interfirm network- and survey data, we find that triadic embeddedness affects two sources of relational rents – relationship learning and trust-based governance. Learning and trust-based governance, in turn, increase two indicators of interfirm performance – cost reductions and end-product enhancements. The study contributes to a broader understanding of the relational view by showing that triadic embeddedness has direct positive effects on the sources of relational rents and indirect positive effects on interfirm performance.