Network influence and organizational performance: The effects of tie strength and structural equivalence Francesca Pallotti a, * , Alessandro Lomi b,c a Center for Organizational Research (CORe), University of Lugano, Via G. Buffi 13, 6900 Lugano, Switzerland b Center for Organizational Research (CORe), University of Lugano, Switzerland c University of Bologna, Via Zamboni 33, 40126 Bologna, Italy KEYWORDS Interorganizational net- works; Tie strength; Structural equivalence; Organizational performance Summary We combine theory and empirical evidence to develop and test three related claims about how ties strength and structural equivalence affect interorganizational per- formance similarity. First, network partners attain similar levels of performance because direct network ties facilitate information and resource sharing, and the diffusion of orga- nizational practices. Organizations occupying similar network positions attain similar lev- els of performance because they face similar competitive constraints. Second, because mechanisms underlying performance similarity implied by direct network ties and similar- ity in network positions are different, strength of network ties and network position affect different dimensions of organizational performance. Third, we expect that tie strength will affect aspects of performance that are more likely to be influenced by processes acti- vated by the direct contact between network partners. We expect structural equivalence to affect more strongly those aspects of organizational performance that are more directly influenced by competition. An analysis of interorganizational networks and orga- nizational performance within a regional community of hospitals provides evidence in sup- port of these claims. Models estimated on a sample of 8190 interorganizational dyads suggest that the effects of tie strength and structural equivalence on organizational per- formance are highly differentiated and contingent on specific aspects of performance. We show that these conclusions are robust with respect to a wide variety of other factors that may be responsible for performance similarity including competitive interdependence, structural homophily, and resource complementarity. ª 2011 Elsevier Ltd. All rights reserved. Introduction How do networks of relations in which organizations are embedded influence their performance? Substantial re- search on interorganizational networks conducted across a variety of empirical setting and theoretical orientations sus- tains two broad views (Mizruchi & Marquis, 2005). The first view is based on the concept of strength of contact between organizations and their network partners. Network ties between organizations act as conduits for information, 0263-2373/$ - see front matter ª 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.emj.2011.02.005 * Corresponding author. Tel.: +41 58 6664471. E-mail address: francesca.pallotti@usi.ch (F. Pallotti). European Management Journal (2011) 29, 389– 403 journal homepage: www.elsevier.com/locate/emj