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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 amongst 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, whilst there is no support for a potential overlap-innovation mechanism.

Suggested Citation

  • 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," Papers in Evolutionary Economic Geography (PEEG) 1609, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2016.
  • Handle: RePEc:egu:wpaper:1609
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    References listed on IDEAS

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    Cited by:

    1. Blanca L. Delgado-Márquez & Nuria E. Hurtado-Torres & Luis E. Pedauga & Eulogio Cordón-Pozo, 2018. "A network view of innovation performance for multinational corporation subsidiaries," Regional Studies, Taylor & Francis Journals, vol. 52(1), pages 47-67, January.
    2. Grzegorz Micek, 2019. "Geographical Proximity Paradox Revisited: The Case of IT Service SMEs in Poland," Sustainability, MDPI, Open Access Journal, vol. 11(20), pages 1-18, October.
    3. Roman Martin & Jan Ole Rypestøl, 2018. "Linking content and technology: on the geography of innovation networks in the Bergen media cluster," Industry and Innovation, Taylor & Francis Journals, vol. 25(10), pages 966-989, November.
    4. Marte C.W. Solheim & Ron Boschma & Sverre Herstad, 2018. "Related variety, unrelated variety and the novelty content of firm innovation in urban and non-urban locations," Papers in Evolutionary Economic Geography (PEEG) 1836, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2018.
    5. Hilda Bø Lyng & Eric Christian Brun, 2018. "Knowledge Transition: A Conceptual Model of Knowledge Transfer for Cross-Industry Innovation," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 15(05), pages 1-23, October.
    6. Hilda Bø Lyng & Eric Christian Brun, 2020. "Innovating with Strangers; Managing Knowledge Barriers Across Distances in Cross-Industry Innovation," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 17(01), pages 1-33, February.
    7. Lo, Jade Y. & Li, Haiyang, 2018. "In the eyes of the beholder: The effect of participant diversity on perceived merits of collaborative innovations," Research Policy, Elsevier, vol. 47(7), pages 1229-1242.
    8. 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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    Keywords

    Proximities; innovation; networks; collaboration; Goldilocks principle; Norway;

    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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