Correspondent: (Wang Tianjian) The paper “Network Centrality, Shared Business Ties and share of Large Business Partners”, jointly completed by Professor Bao Qun and doctoral student Dan Jiali, was published in the top journal of economics, Economic Research Journal, in the 10th issue of 2021.

Compared with traditional business relationships, business ties with customers and suppliers are becoming increasingly complex in modern business networks, which help firms to better develop new customer-supplier relationships, thereby mitigating the risk of over-concentration of large business partners. Using the data of Chinese listed firms from 2009 to 2017, this paper empirically investigates the influence of network centrality and network structure on business ties. The research results of this paper are as follows. (1) In contrast with peripheral firms of the business network, firms with higher centrality are more likely to diversify the market share of major customers using the network advantages; in the meantime, business partners located at the core of network cannot be substituted easily. (2) Shared business ties help firms to diversify the share of business partners. This role becomes more significant when the search efficiency of firms in the business network increases, shared relationship gets more intimate, the number of shared firms is larger and the similarity of shared firms is higher. However, the cost of diversification is higher when the substitutability of incumbent customers is lower and the duration of business tie is longer. (3) Network position and network structure influence firms’ ability to diversify business risks in terms of intensive and extensive margin of business relationship, as well as the dynamics of business relationship which is measured by the entry of new partners and the exit of old ones. Overall, the paper documents a positive effect of business network on the diversification of business relationship, which promotes the ability of firms to flexibly protect themselves better from operating risk if market uncertainty.

Founded in 1955, Economic Research Journal is a national-level comprehensive journal of economic theories. It is sponsored by Institute of Economics of CASS and is in the charge of Chinese Academy of Social Science. It is widely recognized as one of the top journals of economics by universities and research institutions in China.