Network ties in the outside-in strategy: Contingencies of resource endowments and absorptive capacity

Network ties play an important role in the outside-in strategy for marketing and competitive advantages. However, prior research adopting the outside-in view has not always been clear on the impact of network ties. We propose a contingency view that the mere presence of network ties is not sufficient for performance improvement; rather, network ties need to be combined with resource endowments of the alters and absorptive capacity of the ego. These three components work together and reinforce each other in inducing desirable outcomes. We further apply this contingency view to the adoption of health information technology (HIT) by US hospitals. The results strongly support the contingency view. Our study helps reconcile the conflicting findings on the impact of network ties and contributes to the literature of outside-in strategy and social network.