Value network and firm performance: the role of knowledge distance and environmental uncertainty

Purpose This study aims to empirically examine the relationships among perceived environmental uncertainty (EV), the level of knowledge distance (KD) and the impact of value network on firm performance. Design/methodology/approach The quantitative analysis is based on data from 243 Chinese companies with engineering, procurement and construction (EPC) business in the context of the COVID-19 pandemic. Findings The two dimensions of value network [network centrality (NC) and network openness (NO)] have a different impact on firm performance [financial performance (FP) and market performance (MP)]. NC has a positive impact on FP, but not on MP. NO has a positive effect on MP, but not on FP. A reduced KD mediates the relationship between value network and firm performance. Moreover, it fully mediates the relationship between NC and MP, NO and FP. Finally, during the COVID-19 pandemic, only EV has a moderating effect on KD and MP. Research limitations/implications This study is limited in terms of data set because it relies on a limited amount of cross-sectional data from one specific country. Therefore, researchers are encouraged to test the proposed propositions further. Practical implications The present findings suggest that EPC professionals should pay more attention to the EV, which may be impacted by policy, technology and the economy. This research has actionable implications for the reform of EPC in the construction industry, and practical recommendations for EPC firms to improve their corporate performance. Originality/value The results measure the complementary effects of both dimensions of value network (NC and NO) on two distinct aspects of firm performance (MP and FP) and assess the moderating effect of EV and KD in the context of the COVID-19 pandemics.