Not too close, not too far: testing the Goldilocks principle of 'optimal' distance in innovation networks

Article · December 2016with259 Reads
DOI: 10.1080/13662716.2016.1184562
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’ fromone 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.
  • ...Organisational proximity reflects shared understandings of control and coordination of organisations (Boschma 2005;Balland, Boschma, and Frenken 2015) and, finally, cognitive proximity is the degree to which actors have a shared knowledge base that enables effective learning (Nooteboom 2000;Boschma 2005;Balland, Boschma, and Frenken 2015). Balland, Boschma, and Frenken (2015) review of the proximity literature shows that significant progress has been made in the disentanglement of the proximity dimensions (Boschma 2005;Mattes 2012), understanding the proximity paradox where increasing proximity results in less innovation (Broekel and Boschma 2012), evaluations of the optimal distance for innovation, or the 'Goldilocks principle' (Boschma 2005;Fitjar, Huber, and Rodríguez-Pose 2016), and the phenomenon of temporary proximity (Torre and Rallet 2005;Torre 2008). Studies of proximity have also developed significantly and rapidly from early, more static approaches (Boschma 2005; Knoben and Oerlemans 2006; see Appendix 1 for a summary of the related assumptions and MNE relevance) to a more recent emphasis on a dynamic theory of proximity and knowledge networks related to innovation (Balland, Boschma, and Frenken 2015). ...
  • ...This suggests that the heterogeneous types of knowledge emerging from different types of external partners may be combined advantageously up to a certain level, supporting the argument for knowledge sourcing in order to increase the 'knowledge portfolio'. Moreover, this result confirms the Goldilocks principle proposed by Fitjar et al. (2016), according to which partners should be not too close and not too far to make the most of interaction. ...
  • ...Knowledge spillovers are not expected between all sectors, as some level of complementarity in competences is required or at least beneficial for knowledge spillovers. However, too much proximity potentially hampers interactive learning and innovation as well (Nooteboom 2001;Boschma 2005;Fitjar et al. 2016). Consequently, neither regional diversity nor regional specialization are beneficial for innovation and regional development per se. ...
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