The double-edged sword of external search in collaboration networks: embeddedness in knowledge networks as moderators

Abstract

Purpose The purpose of this paper is to analyze the inverted U-shaped relationship between external search in the collaboration network and firm innovation outcomes. It also seeks to explore whether these curvilinear relationships are moderated by the network centrality and structural holes in the knowledge network. Design/methodology/approach In this empirical research, the authors collected a sample of patents in the smartphone industry over the period of 2000-2017. Then the authors examined the direct roles of external search breadth and depth in the collaboration network and the moderating role of network embeddedness in the knowledge network by using negative binomial regression. Findings Results found that external search in the collaboration network contributes more to firm innovation outcomes when the breadth and depth of the external search are moderate rather than high or low. Furthermore, both network centrality and structural holes in the knowledge network have positive effects on the external search breadth – innovation outcomes and external search depth – innovation outcomes relationships. Research limitations/implications The authors collected the patent data within the single industry and excluded other types of industries. This may limit the generalization of the findings. Practical implications The paper has practical implications for adopting appropriate search strategies in the collaboration network and developing a better understanding of the effect of network embeddedness in the knowledge network on firm innovation outcomes. The findings suggest future directions for technology-intensive industries to improve their innovation output. Originality/value This study adds value to open innovation literature by pointing out a curvilinear relationship (inverted U-shaped) between external search breadth/depth and innovation outcomes in collaboration networks, in contrast to studies focused on firms’ external collaboration strategies in a certain industry context. Furthermore, this study reinforces the key contingent role of embeddedness in knowledge networks. This study provides a valuable theoretical framework of innovation outcome determinants by connecting the network perspective of open innovation theory with an embeddedness view.

The Effect of Formal and Informal External Collaboration on Innovation Performance of SMEs: Evidence from China

“…For these contradictory findings, many researchers think the reason is that most of the previous studies regarded external collaboration as a one-dimension concept and neglected the fact that there are many classifications of external collaboration. Therefore, many researchers have begun to classify external collaboration into breadth and depth of collaboration [8,9], intra-and inter-regional external collaboration [10,11], and academic and industrial collaboration [12,13], and then explored their effects on innovation performance. However, few of them have paid attention to the formal and informal dimension of external collaboration.…”

“…Therefore, the costs and risks of innovation is too high for SMEs to undertake [42]. When SMEs implement formal external collaboration, they can share human resources and equipment with their partners and develop new products together with their partners, which would thereby reduce the R&D expenditure and the costs of innovation [8,43]. Besides, having various external partners allow firms to capture market demand correctly and have a good command of the development trends of the market and technology, which can reduce the risks of failure and decrease the uncertainty related to the innovation [44].…”

“…First, based on the perspective of formal and informal, this study extends the research on external collaboration-innovation performance relationship by differentiating two types of external collaboration, formal external collaboration and informal external collaboration, and exploring their different effects on the innovation performance of SMEs. Existing studies have mainly paid attention to the breadth and depth of external collaboration [8,9], intraand inter-regional external collaboration [10,11], and academic and industrial collaboration [12,13]. Most of them have ignored the fact that formal and informal collaboration are very common in SMEs' open innovation activities, and neglected the necessity to explore their different effects on SMEs' innovation performance.…”

“…The relationship between external collaboration and firms' innovation performance has increasingly received attention in scientific research, but so far, few of the existing studies have classified external collaboration into formal and informal external collaboration and explored their different impacts on firms' innovation performance. The existing literature has mainly focused on the breadth and depth of external collaboration [8,9], intra-and inter-regional external collaboration [10,11], and academic and industrial collaboration [12,13]. However, in fact, formal and informal external collaboration are very common in firms' practice, and both types of external collaboration are very significant for firms' innovation outcomes [14,15].…”

Temporal dimensions of knowledge exchanges in horizontal knowledge networks

“…There has been a growing line of inquiry into knowledge exchange in horizontal industry networks (Guercini & Medlin, 2020;Sarala, Junni, Cooper, & Tarba, 2016;Shi, Zhang, & Zheng, 2019), in addition to the realisation of benefits from these networks (e.g. access to knowledge and resources that otherwise are inaccessible) (Balle, Steffen, Curado, & Oliveira, 2019;Botelho, 2018;Sedighi, Lukosch, Brazier, Hamedi, & van Beers, 2018).…”