Network position and firm performance – the mediating role of innovation

Analysing a unique, domain-similar database including all horticulturalists in a major flower-producing country, this paper shows that a firm’s central position in a network significantly improves its financial performance. The effect of strategic positioning in a network is in large part mediated through its enhanced innovativeness. Strategically positioning in a network of firms contributes more to firm performance, both directly as well as indirectly, than other strategic options a firm has available, such as seeking scale, seeking to diversify, pursuing cost advantages, or locating in a cluster.