Do social ties matter for the emergence of dominant design? The moderating roles of technological turbulence and IRP enforcement

Social ties can help firms gain and secure resources. However, it is unclear whether social ties facilitate or inhibit firms' decision-making on dominant design generation. Our study distinguishes the variant roles of business ties and political ties and examines how contextual factors moderate the effects of these ties. Based on archival data of 443 Chinese automotive firms embedded in standard alliances during the period 2005-2009, we find that weak business ties enhance firms' influence on dominant design, and the positive effect of the number of business ties is even stronger when firms operate in a context with higher IRP enforcement. Moreover, the empirical results indicate that when either the IPR enforcement or the technological turbulence is high, establishing political ties is detrimental to a firm's influence on dominant design. Our findings add new insights to the research on social capital, dominant design, and open innovation in the automotive industry. The findings also provide significant implications for managers by showing how they can utilize social ties to influence the emergence of dominant designs in an industry.