Innovation and Diversity in a Dynamic Knowledge Network
AbstractIn this paper we examine the evolution of network formation. We present a model in which companies in an industry can innovate alone or in alliance with others. Alliance formation is based on the cognitive distance of companies. If two companies form an alliance, their probability of success in innovation depends on their proximity in knowledge space, that is, their cognitive distance. Knowledge, on the other hand, is modelled in two dimensions: breadth and depth. The main results of our analysis are that in the present setting heterogeneity decreases among companies whilst innovation can increase and decrease also, depending on the initial parameters of the industry's knowledge endowment. The model also reveales the importance of external shocks in maintaining heterogeneity and concludes with a possible typology of cluster evolution among the dimensions of heterogeneity and innovativeness.
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Bibliographic InfoPaper provided by University of Pécs, Department of Economics and Regional Studies in its series Working Papers with number 2010/1.
Length: 50 pages
Date of creation: Mar 2010
Date of revision: Mar 2010
knowledge network; innovation; knowledge heterogeneity; alliance formation; cluster evolution;
Find related papers by JEL classification:
- I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-17 (All new papers)
- NEP-CSE-2010-07-17 (Economics of Strategic Management)
- NEP-INO-2010-07-17 (Innovation)
- NEP-KNM-2010-07-17 (Knowledge Management & Knowledge Economy)
- NEP-NET-2010-07-17 (Network Economics)
- NEP-URE-2010-07-17 (Urban & Real Estate Economics)
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.:
- Max-Peter Menzel & Dirk Fornahl, 2007. "Cluster Life Cycles - Dimensions and Rationales of Cluster Development," Jena Economic Research Papers 2007-076, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
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