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The problem of embeddedness revisited: Collaboration and market types

  • Andersen, Kristina Vaarst
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    Embeddedness has been touted as a framework for knowledge exchange and innovation, and thus as an important precondition for high-level performance. Embeddedness of economic action in social relations improves access to resources, but over-embeddedness impedes performance. However, until now the association between embeddedness and performance in different markets has been neglected. This paper challenges the predominant view of embeddedness and over-embeddedness as absolute and mutually exclusive conditions. Through regression analyses of novel data from a project-based industry, the paper tests the association between embeddedness and economic performance in different markets, finding a positive association in the domestic market, but a negative association in foreign markets. This divergence in performance is caused in part by selection bias in the access to foreign markets, and in part by accumulation of localized knowledge.

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    Article provided by Elsevier in its journal Research Policy.

    Volume (Year): 42 (2013)
    Issue (Month): 1 ()
    Pages: 139-148

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    Handle: RePEc:eee:respol:v:42:y:2013:i:1:p:139-148
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