A tale of two ties: the impact of a focal city’s direct and indirect collaboration networks on regional innovation

Cities are increasingly leveraging collaborative networks to boost innovation. However, not all cities within a network benefit equally. To explain the cross-city differences in innovation performance, we argue that, ceteris paribus, a focal city’s indirect partners—cities collaborating directly with the focal city’s direct partners but not directly with the focal city—exhibit dual effects. They relationally compete against the focal city for direct partners’ collaborative resources, thereby reducing the focal city’s likelihood of benefiting from the network. They also technologically complement the focal city’s knowledge base, thus not only directly helping its innovation performance but also increasing its collaboration with direct partners. We also argue that the dual effects are contingent upon characteristics of the focal city’s direct partners: they intensify when the direct partners occupy positions of high centrality within the network and when public research organizations constitute a large share of the direct partners’ local innovation actors. We further posit that the indirect partners’ dual effects and their contingency upon direct partners are subject to intellectual property rights protection of the region wherein the focal city locates. We tested our hypotheses with China’s inter-city collaborative network, which we built on patents co-filed by Chinese applicants from different cities over 2007–2019. Fixed-effects negative binomial and ordinary least squares analyses largely supported our hypotheses, with three unexpected granular insights. Our study enriches the network literature by revealing the overlooked yet profound roles that indirect partners play in a city’s innovation activities.