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Networks and innovation: the role of social assets in explaining firms' innovative capacity

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  • Uwe Cantner

    ()
    (Friedrich Schiller University Jena, Department of Economics and Business Adminstration)

  • Elisa Conti

    ()
    (IULM University, Department of Economics and Marketing)

  • Andreas Meder

    ()
    (Graduate College EIC, Friedrich Schiller University Jena and Thuringian Ministry of Economic Affairs)

Abstract

The claim of a positive association between a firm's social assets and its innovative capacity is a widely debated topic in the literature. Although controversial, such an argument has informed recent innovation policy across Germany, increasingly directed to cluster formation. In the light of the growing attention and financial efforts that cluster-based innovation policies are receiving, it is worth answering two main questions. First, are firms with a relatively high level of social capital likely to be more innovative? Second, do companies pursuing innovation in partnership innovate more? This paper empirically answers these questions by exploring a cross-sectoral sample of 248 firms based in the Jena region. On the one hand, the extent to which a firm is integrated in its community life does not contribute to an explanation of its innovative performance. On the other hand, directed cooperation with the specific goal of innovating shows a positive impact on innovative performance. However, the correlation between the extent of the network of co-innovators and firms' innovative capacity presents an inverted U-shaped relation: there is a threshold in the number of co-innovators justified by the costs of innovating by interacting. A policy lesson can be drawn from these findings: cluster-based policies are to be treated with caution as firms face costs of networking and not merely benefits.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-040.

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Date of creation: 02 Jun 2009
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Handle: RePEc:jrp:jrpwrp:2009-040

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Keywords: innovation; social capital; innovation network; innovation cooperation; cluster-based policy.;

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Cited by:
  1. Gunnar Pippel, 2012. "The Impact of R&D Collaboration Networks on the Performance of Firms and Regions: A Meta-Analysis of the Evidence," IWH Discussion Papers 14, Halle Institute for Economic Research.

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