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Network-independent partner selection and the evolution of innovation networks

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  • Joel BAUM
  • Robin COWAN
  • Nicolas JONARD

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

  • Joel BAUM & Robin COWAN & Nicolas JONARD, 2009. "Network-independent partner selection and the evolution of innovation networks," Working Papers of BETA 2009-23, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2009-23
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Martin Kalthaus, 2016. "Knowledge recombination along the technology life cycle," Jena Economic Research Papers 2016-012, Friedrich-Schiller-University Jena.
    2. Baum, Joel A.C. & Cowan, Robin & Jonard, Nicolas, 2012. "Prescriptions for network strategy: Does evidence of network effects in cross-section support them?," MERIT Working Papers 044, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Gao, Bo & Ren, Ruo-en, 2013. "The topology of a causal network for the Chinese financial system," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(13), pages 2965-2976.
    4. Dawid, Herbert & Hellmann, Tim, 2014. "The evolution of R&D networks," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 158-172.
    5. repec:spr:busres:v:10:y:2017:i:1:d:10.1007_s40685-016-0042-7 is not listed on IDEAS
    6. Tom Broekel & Matthias Brachert, 2015. "The structure and evolution of inter-sectoral technological complementarity in R&D in Germany from 1990 to 2011," Journal of Evolutionary Economics, Springer, vol. 25(4), pages 755-785, September.
    7. Lorenzo Cassi & Lorenzo Zirulia, 2012. "Friends and Rivals: Modelling the Social Relations of Inventors," Working Paper series 39_12, Rimini Centre for Economic Analysis.
    8. Savin, Ivan & Egbetokun, Abiodun, 2016. "Emergence of innovation networks from R&D cooperation with endogenous absorptive capacity," Journal of Economic Dynamics and Control, Elsevier, vol. 64(C), pages 82-103.
    9. Abiodun Egbetokun & Ivan Savin, 2014. "Absorptive capacity and innovation: when is it better to cooperate?," Journal of Evolutionary Economics, Springer, vol. 24(2), pages 399-420, April.
    10. Kalm, Matias, 2012. "The Impact of Networking on Firm Performance - Evidence from Small and Medium-Sized Firms in Emerging Technology Areas," Discussion Papers 1278, The Research Institute of the Finnish Economy.
    11. repec:eee:tefoso:v:120:y:2017:i:c:p:298-310 is not listed on IDEAS
    12. Chih-Sheng Hsieh & Michael D. König & Xiaodong Liu, 2012. "Network formation with local complements and global substitutes: the case of R&D networks," ECON - Working Papers 217, Department of Economics - University of Zurich, revised Feb 2017.
    13. Robertson, Paul L. & Casali, G.L. & Jacobson, David, 2012. "Managing open incremental process innovation: Absorptive Capacity and distributed learning," Research Policy, Elsevier, vol. 41(5), pages 822-832.
    14. Francesca Pallotti & Alessandro Lomi & Daniele Mascia, 2013. "From network ties to network structures: Exponential Random Graph Models of interorganizational relations," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(3), pages 1665-1685, April.
    15. repec:eee:touman:v:48:y:2015:i:c:p:354-361 is not listed on IDEAS
    16. repec:spr:scient:v:111:y:2017:i:2:d:10.1007_s11192-017-2320-3 is not listed on IDEAS
    17. Ying-Yu Chen & Yi-Long Jaw, 2014. "How do business groups’ small world networks effect diversification, innovation, and internationalization?," Asia Pacific Journal of Management, Springer, vol. 31(4), pages 1019-1044, December.
    18. Anjos, Fernando, 2016. "Resource configuration, inter-firm networks, and organizational performance," Mathematical Social Sciences, Elsevier, vol. 82(C), pages 37-48.
    19. repec:eee:tefoso:v:120:y:2017:i:c:p:311-322 is not listed on IDEAS
    20. Julie Le Gallo & Anne Plunket, 2016. "Technological gatekeepers, regional inventor networks and inventive performance," Working Papers hal-01422916, HAL.
    21. Castro, Ignacio & Casanueva, Cristóbal & Galán, José Luis, 2014. "Dynamic evolution of alliance portfolios," European Management Journal, Elsevier, vol. 32(3), pages 423-433.
    22. Mario V. Tomasello & Claudio J. Tessone & Frank Schweitzer, 2016. "A Model Of Dynamic Rewiring And Knowledge Exchange In R&D Networks," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 19(01n02), pages 1-23, February.
    23. repec:eee:jeborg:v:145:y:2018:i:c:p:424-434 is not listed on IDEAS

    More about this item

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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