a b s t r a c tThis paper aims to understand better the innovation potential of a firm's alliance network. Here we analyze the role of an alliance network in terms of the technological distance between partners, a firm's network position (centrality) and total network density. We study how these three elements of an alliance network, separately and in combination, affect the 'twin tasks' in exploration, namely novelty creation on the one hand and its efficient absorption on the other hand. For an empirical test, we study technology-based alliance networks in the pharmaceutical, chemical and automotive industries. Our findings indicate that successful exploration indeed seems to require a delicate balance between these two exploration tasks. A second conclusion is that different network positions yield different pay-offs in terms of the number of explorative patents. In other words, success rates for exploration are not spread equally across firms. However, position alone does not tell the full story. Our empirical findings clearly indicate that exploration success also depends on the other two dimensions of embeddedness, namely technological distance and network density. The three elements of network embeddedness need to be considered jointly in order to understand their complementary effects on both novelty creation and absorptive capacity.
Document VersionPublisher's PDF, also known as Version of Record (includes final page, issue and volume numbers) Please check the document version of this publication:• A submitted manuscript is the author's version of the article upon submission and before peer-review. There can be important differences between the submitted version and the official published version of record. People interested in the research are advised to contact the author for the final version of the publication, or visit the DOI to the publisher's website.• The final author version and the galley proof are versions of the publication after peer review.• The final published version features the final layout of the paper including the volume, issue and page numbers. Link to publication General rightsCopyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.• Users may download and print one copy of any publication from the public portal for the purpose of private study or research.• You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal ? Take down policyIf you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. This paper tests hypotheses that in inter-firm alliances innovative performance is aninverted-U shaped function of cognitive distance, that the resulting optimal cognitive distance is higher for exploratory than for exploitative learning, and that optimal cognitive distance depends on absorptive capacity. Most hypotheses are confirmed for 994 alliances in several industries, in the period 1986-1996. The results indicate a new hypothesis that with more knowledge one needs larger cognitive distances to find novelty.
This article contributes to the debate on the relation between trust and control in the management of inter-organizational relations. More specifically, we focus on the question how trust and formal contract are related. While there have been studies on whether trust and contract are substitutes or complements, they offer little insight into the dynamic interaction between the two. They fail to answer, first, whether contract precedes trust or follows it, in other words, what causal relationship exists between the concepts; second, how and why trust and contract can substitute or complement each other; and third, how the various combinations of trust and contract affect a relationship’s development and outcome. In search of answers, we conducted longitudinal case studies to reveal the relationship between trust, contract and relationship outcome in complex inter-firm relationships. We find trust and contract to be both complements and substitutes and find that a close study of a contract’s content offers alternative insight into the presence and use of contracts in inter-firm relationships.
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