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Not too close, not too far: testing the Goldilocks principle of ‘optimal’ distance in innovation networks

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  • Rune Dahl Fitjar
  • Franz Huber
  • Andrés Rodríguez-Pose

Abstract

This paper analyses how the formation of collaboration networks affects firm-level innovation by applying the ‘Goldilocks principle’. The ‘Goldilocks principle’ of optimal distance in innovation networks postulates that the best firm-level innovation results are achieved when the partners involved in the network are located at the ‘right’ distance, i.e. ‘not too close and not too far’ from one another, across non-geographical proximity dimensions. This principle is tested on a survey of 542 Norwegian firms conducted in 2013, containing information about firm-level innovation activities and key innovation partners. The results of the ordinal logit regression analysis substantiate the Goldilocks principle, as the most innovative firms are found among those that collaborate with partners at medium levels of proximity for all non-geographical dimensions. The analysis also underscores the importance of the presence of a substitution--innovation mechanism, with geographical distance problems being compensated by proximity in other dimensions as a driver of innovation, while there is no support for a potential overlap--innovation mechanism.

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  • Rune Dahl Fitjar & Franz Huber & Andrés Rodríguez-Pose, 2016. "Not too close, not too far: testing the Goldilocks principle of ‘optimal’ distance in innovation networks," Industry and Innovation, Taylor & Francis Journals, vol. 23(6), pages 465-487, August.
  • Handle: RePEc:taf:indinn:v:23:y:2016:i:6:p:465-487
    DOI: 10.1080/13662716.2016.1184562
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    1. repec:eee:respol:v:47:y:2018:i:7:p:1229-1242 is not listed on IDEAS
    2. Wallin, Tina, 2017. "An empirical study of firms’ absorptive capacity and export diversification," Working Paper Series in Economics and Institutions of Innovation 452, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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