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Networks-independent partner selection and the evolution of innovation networks

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  • Michel Beine
  • Paul De Grauwe
  • Marianna Grimaldi

    () (CREA, University of Luxembourg)

Abstract

Empirical research on strategic alliances has focused on the idea that alliance partners are selected on the basis of social capital considerations. In this paper we emphasize instead the role of complementary knowledge stocks (broadly defined) in partner selection, arguing not only that knowledge complementarity should not be overlooked, but that it may be the true causal force behind alliance formation. To marshal evidence on this point, we design a simple model of partner selection in which firms ally for the purpose of learning and innovating, and in doing so create an industry network. We abstract completely from network-based structural and strategic motives for partner selection and focus instead on the idea that firms’ knowledge bases must “fit” in order for joint leaning and innovation to be possible, and thus for an alliance to be feasible. The striking result is that while containing no social capital considerations, this simple model replicates the firm conduct, network structure, and contingent effects of network position on performance observed and discussed in the empirical literature.

Suggested Citation

  • Michel Beine & Paul De Grauwe & Marianna Grimaldi, 2008. "Networks-independent partner selection and the evolution of innovation networks," CREA Discussion Paper Series 08-14, Center for Research in Economic Analysis, University of Luxembourg.
  • Handle: RePEc:luc:wpaper:08-14
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    File URL: http://wwwfr.uni.lu/content/download/16906/214267/file/2008-14_Networks-independent%20partner%20selection%20and%20the%20evolution%20of%20innovvation%20networks.pdf
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    References listed on IDEAS

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    1. Robin Cowan & Nicolas Jonard, 2008. "If the Alliance Fits . . . : Innovation and Network Dynamics," Working Papers of BETA 2008-06, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    2. Oxley, Joanne E, 1997. "Appropriability Hazards and Governance in Strategic Alliances: A Transaction Cost Approach," Journal of Law, Economics, and Organization, Oxford University Press, vol. 13(2), pages 387-409, October.
    3. Mowery, David C. & Oxley, Joanne E. & Silverman, Brian S., 1998. "Technological overlap and interfirm cooperation: implications for the resource-based view of the firm," Research Policy, Elsevier, vol. 27(5), pages 507-523, September.
    4. Holme, Petter & Min Park, Sung & Kim, Beom Jun & Edling, Christofer R., 2007. "Korean university life in a network perspective: Dynamics of a large affiliation network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 373(C), pages 821-830.
    5. Joel A. C. Baum & Andrew V. Shipilov & Tim J. Rowley, 2003. "Where do small worlds come from?," Industrial and Corporate Change, Oxford University Press, vol. 12(4), pages 697-725, August.
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