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Emergence of innovation networks from R&D cooperation with endogenous absorptive capacity

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  • Savin, Ivan
  • Egbetokun, Abiodun

Abstract

This paper extends the existing literature on strategic R&D alliances by presenting a model of innovation networks with endogenous absorptive capacity. The networks emerge as a result of dynamic cooperation between firms occupying different locations in the knowledge space. Partner selection is driven by absorptive capacity which is itself influenced by cognitive distance and R&D investment allocation. Under different knowledge regimes, we examine the structure of networks that emerge and how firms perform within such networks. We find networks that exhibit small world properties which are generally robust to changes in the knowledge regime. Certain network strategies such as occupying brokerage positions or maximising accessibility to potential partners pay off, especially in ‘young’ industries with limited involuntary but abundant voluntary spillovers. This particular result is driven by endogenous absorptive capacity.

Suggested Citation

  • Savin, Ivan & Egbetokun, Abiodun, 2016. "Emergence of innovation networks from R&D cooperation with endogenous absorptive capacity," Journal of Economic Dynamics and Control, Elsevier, vol. 64(C), pages 82-103.
  • Handle: RePEc:eee:dyncon:v:64:y:2016:i:c:p:82-103
    DOI: 10.1016/j.jedc.2015.12.005
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    Citations

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    Cited by:

    1. Johannes van der Pol, 2015. "Structural dynamics of the French aerospace sector: A network analysis," Working Papers hal-01284993, HAL.
    2. Michael P. Schlaile & Johannes Zeman & Matthias Mueller, 2018. "It’s a match! Simulating compatibility-based learning in a network of networks," Journal of Evolutionary Economics, Springer, vol. 28(5), pages 1111-1150, December.
    3. Savin, Ivan & Egbetokun, Abiodun, 2016. "Emergence of innovation networks from R&D cooperation with endogenous absorptive capacity," Journal of Economic Dynamics and Control, Elsevier, vol. 64(C), pages 82-103.
    4. Johannes VAN DER POL, 2016. "Social interactions between innovating firms: an analytical review of the literature," Cahiers du GREThA (2007-2019) 2016-23, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    5. Tur, Elena M. & Azagra-Caro, Joaquín M., 2018. "The coevolution of endogenous knowledge networks and knowledge creation," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 424-434.
    6. Bogner, Kristina, 2019. "Knowledge networks in the German bioeconomy: Network structure of publicly funded R&D networks," Hohenheim Discussion Papers in Business, Economics and Social Sciences 03-2019, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    7. Abiodun Egbetokun & Ivan Savin, 2014. "Absorptive capacity and innovation: when is it better to cooperate?," Journal of Evolutionary Economics, Springer, vol. 24(2), pages 399-420, April.
    8. Matthias Mueller & Kristina Bogner & Tobias Buchmann & Muhamed Kudic, 2017. "The effect of structural disparities on knowledge diffusion in networks: an agent-based simulation model," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(3), pages 613-634, October.

    More about this item

    Keywords

    Absorptive capacity; Cognitive distance; Innovation; Knowledge spillovers; Networks; Agent-based modeling;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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