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Empirical Tests Of Optimal Cognitive Distance

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Author Info
Wuyts, S.H.K.
Colombo, M.G.
Dutta, S.
Nooteboom, B. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)

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Abstract

This article provides empirical tests of the hypothesis of ‘optimal cognitive distance’, proposed by Nooteboom (1999, 2000), in two distinct empirical settings. Variety of cognition, needed for learning, has two dimensions: the number of agents with different cognition, and differences in cognition between them (cognitive distance). The hypothesis is that in interfirm relationships optimal learning entails a trade-off between the advantage of increased cognitive distance for a higher novelty value of a partner’s knowledge, and the disadvantage of less mutual understanding. If the value of learning is the mathematical product of novelty value and understandability, it has an inverse-U shaped relation with cognitive distance, with an optimum level that yields maximal value of learning. With auxiliary hypotheses, the hypothesis is tested on interfirm agreements between pharmaceutical companies and biotech companies, as well as on interfirm agreements in ICT industries.

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Paper provided by Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam. in its series Research Paper with number ERS-2004-007-ORG Revision_Date: 2008-02-15.

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Date of creation: 19 Jan 2004
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Handle: RePEc:dgr:eureri:30001256

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Keywords: alliances innovation organizational learning biotechnology ICT

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  3. Arora, Ashish & Gambardella, Alfonso, 1990. "Complementarity and External Linkages: The Strategies of the Large Firms in Biotechnology," Journal of Industrial Economics, Blackwell Publishing, vol. 38(4), pages 361-79, June. [Downloadable!] (restricted)
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  6. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
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  7. Jaffe, Adam B., 1989. "Characterizing the "technological position" of firms, with application to quantifying technological opportunity and research spillovers," Research Policy, Elsevier, vol. 18(2), pages 87-97, April. [Downloadable!] (restricted)
  8. Bresnahan, Timothy F & Greenstein, Shane, 1999. "Technological Competition and the Structure of the Computer Industry," Journal of Industrial Economics, Blackwell Publishing, vol. 47(1), pages 1-40, March. [Downloadable!] (restricted)
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  9. Abernathy, William J. & Clark, Kim B., 1985. "Innovation: Mapping the winds of creative destruction," Research Policy, Elsevier, vol. 14(1), pages 3-22, February. [Downloadable!] (restricted)
  10. Pindyck, Robert S, 1988. "Irreversible Investment, Capacity Choice, and the Value of the Firm," American Economic Review, American Economic Association, vol. 78(5), pages 969-85, December. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Nooteboom, Bart, 2006. "Organization, evolution, cognition and dynamic capabilities," Discussion Paper 41, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  2. Nooteboom, Bart, 2005. "Elements of a cognitive theory of the firm," Discussion Paper 46, Tilburg University, Center for Economic Research. [Downloadable!]
  3. Enrico Santarelli & Francesca Lotti, 2007. "The Relationship among innovative Output, Productivity, and Profitability. A test comparing USPTO and EPO data," Jena Economic Research Papers 2007-020, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek. [Downloadable!]
  4. Nooteboom, Bart, 2005. "Learning to trust," Discussion Paper 47, Tilburg University, Center for Economic Research. [Downloadable!]
  5. Nooteboom, Bart & Vanhaverbeke, Wim & Duysters, Geert & Gilsing, Victor & Oord, Ad van den, 2006. "Optimal cognitive distance and absorptive capacity," Discussion Paper 33, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  6. Nooteboom, Bart, 2005. "Innovation, learning and cluster dynamics," Discussion Paper 44, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
    • Nooteboom, B., 2004. "Innovation, learning and cluster dynamics," Research Paper ERS-2004-006-ORG Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni. [Downloadable!]
  7. Uwe Cantner & Andreas Meder, 2007. "Technological proximity and the choice of cooperation partner," Journal of Economic Interaction and Coordination, Springer, vol. 2(1), pages 45-65, June. [Downloadable!] (restricted)
  8. Nooteboom, Bart, 2005. "Learning and governance in inter-firm relations," Discussion Paper 38, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
    • Nooteboom, B., 2001. "Learning and Governance in Inter-Firm Relations," Research Paper ERS-2001-71-ORG Revision_, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni. [Downloadable!]
    • Nooteboom, B., 2004. "Learning And Governance In Inter-Firm Relations," Research Paper ERS-2004-003-ORG Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni. [Downloadable!]
  9. S. Bhaduri & H. Worch, 2008. "Past Experience, Cognitive Frames, and Entrepreneurship: Some Econometric Evidence from the Indian Pharmaceutical Industry," Papers on Econonmics and Evolution 2008-04, Max Planck Institute of Economics, Evolutionary Economics Group. [Downloadable!]
  10. Vanhaverbeke, W.P.M. & Beerkens, B.E. & Duysters, G.M., 2003. "Explorative and exploitative learning strategies in technology-based alliance networks," ECIS Working Papers 03.22, Eindhoven Centre for Innovation Studies, Eindhoven University of Technology. [Downloadable!]
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