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Is an Imitation Strategy an Enabler or a Hindrance for Exploitative or Exploratory Innovation?—The Moderating Effect of Embeddedness in Knowledge Networks
Abstract
The present open innovation environment provides firms with considerable opportunities to imitate and learn from one another and makes them deeply embedded in knowledge networks, where the structural position has a great influence on firms’ R&D activities. However, the relationship between imitation and innovation, as two primary R&D approaches that firms follow in technological development, remains inconclusive. To address the inconsistent arguments concerning the appropriate role of imitation, this article explores the effects of imitation and its interaction with embeddedness in knowledge networks on two types of technological innovation: exploitative and exploratory innovations. Empirical analyses based on patent data from 175 Chinese biopharmaceutical firms from 2008 to 2018 show a prominent promoting effect of imitation on exploitative and exploratory innovation. However, the positive effects of technological imitation strategies on two types of innovation will be weakened as firms are increasingly central in the knowledge network, whereas occupying many structural holes has the opposite effect. These results offer new theoretical and practical implications to the technological imitation and innovation research domains.
... In so doing, their competitive advantages in the area of LCI can be guaranteed. Moreover, firms' success rate of innovating low-carbon technologies and entering new market elements can benefit from spanning structural holes positions by means of efficiently operating external search in collaboration networks and learning industrial threats and opportunities from technological imitation [51], [52]. Collectively, we conjecture that: ...
... As stated earlier, board interlocks play a key role in disseminating diverse and useful information between firms, and in a similar vein, serve as information conduits among organizations [4], [22]. Specifically, interlocking directorates within the same networks (in the sense of alliance) tend to exchange updated information that may be unavailable or costly for firms without interlocking experience to access [20], [23], so that the network members have more accurate and symmetrical information regarding the emerging market demand, supply chain partners, financing channels, and innovation policies, in particular for those firms located in advantageous network positions [51]. This enables them to mitigate financial constraints and make optimal decisions on developing LCI programs. ...
... Furthermore, director interlocks contribute to more interactions between firms whether they have similar or diversified knowledge backgrounds. These interlocking directorates could exchange expertise and learning experiences, accelerating firms' capacities to learn, assimilate, combine, and recombine external knowledge resources [51]. In fact, occupying advantageous network positions regardless of central network position or structural holes position will help such firms enhance their abilities to understand the cause-effect of innovation activities and assimilate tacit knowledge, thereby strengthening a firm's capacity to absorb knowledge acquired from network memberships [51]. ...
Through combining the resource dependence theory and social network theory, this study sheds light on how two major kinds of interlocking network positions—central network position and structural holes position—drive corporate low-carbon innovation. We consider the mediating effect of information asymmetry and knowledge absorptive capacity to reap benefits from occupying the two advantageous network positions. We have empirically investigated a sample of 3365 listed firms over the period of 2009–2018 drawn from China, the largest emerging market economy as well as the biggest carbon dioxide emitter. Our main results show that either holding a central network position or spanning a structural holes position plays a significant role in stimulating low-carbon technologies, and the promotion effect can be partially channeled through downward information asymmetry and upward knowledge absorptive capacity. Our findings differ from earlier work because of our emphasis on network position, and our specific focus on corporate low-carbon innovation and China's unique setting, rather than network size, greenhouse gas emissions, and developed economies. This study also provides significant implications for executives striving to improve firms’ low-carbon innovation performance, and for policymakers seeking ways to fulfill the mission of carbon dioxide abatement.
... Finally, it is important to recognise the limitations of using patent data as an indicator of corporate green innovation. It is important to recognise that certain low-carbon innovation activities may not be accurately captured through patenting alone (Lu et al., 2022), which implies that relying solely on patent data might lead to an underestimation of an enterprise's green innovation efforts. Furthermore, we did not include a sample of financial sector companies that did not have any patent records. ...
... T A B L E 1 0 Indirect effect of gti (Sobel Test Finally, it is crucial to acknowledge the limitations associated with employing patent data as a measure of corporate green technology innovation. It is important to recognize that certain low-carbon innovation activities may not be accurately captured through patenting alone (Lu et al., 2022), which implies that relying solely on patent data might lead to an underestimation of a firm's green technology innovation (GTI) efforts. Furthermore, we didn't include a sample of financial sector companies that didn't have any patent records. ...
Using social network theory and resource dependence theory, this study undercovers whether independent directors' interlocks contribute directly to the corporate financial performance of Chinese firms or indirectly through green technology innovation. Furthermore, we scrutinize how the environmental protection management system affects the path between independent directors' interlocks and green technology innovation. Using a sample of 4902 listed firms in China over the period of 2010–2022, the results indicate that firms possess interlocks through their independent directors play a crucial role in fostering performance and developing low‐carbon technologies. With an environmental protection management system, the impact of the independent directors' interlocks on corporate green technology innovation is stronger, indicating the significant role of corporate internal environmental context. This study offers practical implications for firms and policymakers by demonstrating how independent director interlocks can simultaneously advance corporate and national economic and environmental objectives.
... On the contrary, lower levels of big data management skills will reduce the ability of the executive team to identify market potential opportunities or threats, thereby weakening the driving force behind external knowledge search, and leading to less efficiency-based business model innovation activities. [19] believe that big data management skills will mediate the mediation effect between external knowledge search and the identification ability and efficiency-based business model innovation of the executive team. The higher the level of big data management skills, the stronger this mediation effect will be, and vice versa. ...
Objectives: Business model innovation is significant for corporation performance. Unclear or poorly designed business models can only achieve moderate or insignificant results in terms of performance. Under the view of innovation theory, multiple factors affect the efficiency-based business model innovation. Big data capabilities, knowledge creation, and Institutional environment are proposed. Methods: With the collection from 513 pig farming enterprises in China, this research analyzes the relationships among big data capabilities, knowledge creation, institutional environment, and efficiency-based business model innovation by SMART-PLS. Findings: As a result, big data capabilities have a positive impact on efficiency-based business model innovation. Big data capabilities have a positive impact on knowledge creation. Knowledge creation has a positive impact on efficient business model innovation, which is supported. Knowledge creation mediates between big data capabilities and efficient business model innovation, which is supported. The impact of institutional environment regulation knowledge creation on efficient business model innovation. Novelty:This research has theoretical and practical contributions. This study implies the theory of innovation to the practice. And it also enriches the literature and research on business model innovation. Doi: 10.28991/ESJ-2024-08-04-016 Full Text: PDF
... Dynamic capability has positive influence on the combined dimension of ambidexterity, and the relational network play a moderating role [17]. Imitation shows a prominent promoting effect on exploitative and exploratory innovation [18]. However, the positive effects of technological imitation strategies on two types of innovation will be weakened as firms are increasingly central in the knowledge network. ...
Ambidextrous innovation synergy is an effective way for new entrants and R&D entities to break the blockade of key core technologies. This paper constructs a tripartite evolutionary game model of new entrants, the R&D entity, and monopoly enterprises under the monopoly situation of key core technologies, discusses the dynamic equilibrium process of how new entrants cooperate with the R&D entity to carry out the ambidextrous innovation synergy strategy, and extends the model to the policy subsidy situations of different development stages of key core technology. The results show that the monopoly of key core technologies enhances the original innovation search ability of new entrants and promotes the evolution of enterprise imitation innovation to the exploratory innovation strategy. In the basic research stage of key core technology, the exploratory innovation strategy of new entrants is more sensitive to the cost of network embedding and the original innovation knowledge search. New entrants prefer the imitation innovation strategy, and policy subsidies have no significant effect on exploratory innovation. In the promotion stage of the key core technology market, fiscal and tax subsidies can more easily promote the evolution of new entrants from the imitative innovation strategy to the exploratory innovation strategy than R&D subsidies, and network embeddedness can induce enterprises to carry out exploratory innovation only when a certain threshold is reached. In addition, this paper discusses the influence mechanism of monopoly enterprises' suppression intensities and key core technology breakthrough probabilities on the evolution equilibrium of new entrants' ambidextrous innovation synergy strategies.
Achieving independent technological innovation (IDTI) through technological leapfrogging has become a top strategic priority for high-tech firms aiming to thrive in the era of techno-geopolitics. However, existing research lacks a comprehensive analysis of the transformation process from imitative technological innovation (IMTI) to IDTI, particularly from the perspective of knowledge seeking (KS) and knowledge creation (KC) activities. To address this gap, this study conducts a double-case comparative case analysis of two highly successful Chinese high-tech firms—one in advanced manufacturing and the other in the ICT industry. This study explores how these firms transition from leveraging KS for IMTI to fostering KC for IDTI. This study offers a deeper exploration into the interaction and conversion of private and public knowledge through specific knowledge activities across
different organizational strategies. It examines how high-tech firms transition from KS to KC, revealing the process mechanism behind their shift from IMTI to IDTI. Additionally, this study uncovers the inherent nature of evolutionary upgrading—open knowledge transcendence—and interprets its intrinsic nature from exploitative and exploratory perspectives. By doing so, this study contributes to knowledge creation theory and organizational theory in the techno-geopolitics age, filling the gap in research on the evolution of technological innovation from a knowledge-based perspective.
This study anchors itself in knowledge network theory and rivalry theory to explore the antecedents of exploration by examining the possibility of technological crowding, that is, a firm position in crowded technological fields, as the enabler of firms' exploratory innovation performance. For this purpose, we adopted regression analysis for panel data with fixed effects and considered the data of 4,100 firm-year observations of Taiwanese listed companies in the electronics industry from 2000 to 2021. The findings suggest that technological crowding urges firms to pursue exploration to ease heightened competition intensity and crowd out their competitors. Recalling the literature on the competency trap phenomenon in which some dominant firms may exhibit technological superiority underperformance, we further propose that the dark side of technological superiority is more visible when firms are positioned in crowded technological areas. Specifically, firms with stronger combinatorial capabilities or greater technological prestige refrain from investing in exploration because they are tied with high couplings between their homogeneous knowledge elements and indulge themselves in existing success. Our findings remain robust after adjusting the window of research and using the negative binomial regression with fixed effects based on the alternative measure of exploratory innovation. This study contributes significantly to the literature on technological position and knowledge networks by shedding light on the critical role of technological crowding in propelling firms' exploration efforts. Our results also offer significant implications for executives in dominant firms and policymakers to become more aware of the competency trap and seek ways to span technological boundaries.
Artificial intelligence capabilities (AIC) can influence supply chain management (SCM) in multiple ways. This study explores how generative artificial intelligence capabilities (GAIC) could affect digital supply chain performance (DSCP) through ambidexterity innovation (AMI), which includes both elements, exploratory and exploitative innovations in the manufacturing firms (MFs) in Jordan as a developing and emerging economy. This study adopted a quantitative methodology for the data collection process applying a cross-sectional approach through testing deductive-hypotheses techniques. 263 valid surveys were used for analysis using hybrid analysis measurements (i.e., PLS-SEM, and CB-SEM). Further, it was applied data reliability, convergent validity, and discriminant validity tests. Additionally, examined the mediating effect of exploratory innovation (EXPI), and exploitative innovation (EXTI) on DSCP. The study findings assured that the proposed direct and indirect causal associations illustrated in the study model were accepted due to that all associations between the dimensions s were statistically significant. The findings of the GAIC supported a positive relationship between GAIC and the DSCP, GAIC on EXPI and EXTI, and EXPI and EXTI on DSCP respectively. Furthermore, the mediating effect of EXPI and EXTI is statistically significant, which was confirmed. This study developed a conceptual model to merge GAIC, AMI, and DSCP. This study provides new outcomes that bridge the existing research gap in the literature by testing the mediation model with a focus on the MF benefits of GAIC to improve levels of EXPI, EXTI, and DSCP in Jordan as a developing and emerging economy. Furthermore, this study is considered unique, as it was the first study in Jordan, and through applying hybrid analysis measurements using both PLS-SEM and CB-SEM methods.
The electric vehicle industry is staggering along an arduous path to dominant design and subsequent mass-market reach. We examine technology-specific factors that influence the emergence of a dominant design and posit that the technologies most central to technological and regional innovation are also those furthest away from establishing a dominant design. We find support for our hypothesized model in a panel data analysis of 2958 electric vehicle patents representing the development of 72 technologies over ten years. These technologies are even less likely to have a dominant design when they are complex, i.e., they have many components or interactions. However, for technologies with high innovation performance, the impact of complexity is inverted. Then, technological centrality, i.e., centrality in the technology system, paired with complexity make technologies more likely to converge toward a dominant design. Conversely, technologies with local centrality in a specific region, are more convergent and less complex. These serial interrelations among the antecedents of dominant design provide a more detailed understanding of market-based standardization than previously available. On a practical level, more innovation reduces the barriers generated by complexity. Thus, joint industry-level efforts may be useful to overcome persistent hurdles in the technology life cycle, such as those currently experienced by the electric vehicle industry.
Balancing exploitative innovation and exploratory innovation, i.e., innovation ambidexterity, is conducive to the survival, adaptation, and prosperity of firms, especially high-tech small- and medium-sized enterprises (SMEs). However, due to their liability of smallness, high-tech SMEs face greater challenges in achieving this balance. While many studies have examined the antecedents of innovation ambidexterity, they do not focus on high-tech SMEs, and the role of digitalization has received scant attention. Integrating the views of dynamic capability and organizational inertia, this study aims to offer novel insights into how digitalization affects the innovation ambidexterity of high-tech SMEs. Using the panel data of Chinese high-tech SMEs from 2010 to 2021, we find that as high-tech SMEs increase digitalization, their innovation ambidexterity first decreases, but then increases. Moreover, this U-shaped effect is found to be flattened by performance shortfall. These research findings offer critical implications for high-tech SMEs on their digital strategies and innovation management.
Digital transformation is rapidly emerging as a pivotal topic in business and academic discourse. Prior research has emphasized the profound impact of digital transformation on firm innovation. However, the precise influence of digital transformation on different forms of innovation remains unclear. Meanwhile, the role of change in innovation structures has largely been overlooked. This study investigates how digital transformation influences both exploitative and exploratory innovation through the decentralization of formal and informal innovation structures. Using a dataset of 26,014 patent applications from 156 listed companies in the core industries of China's digital economy, this study demonstrates a prominent promoting effect of digital transformation on exploratory and exploitative innovation. Digital transformation broadens a firm's information channels and facilitates organizational agility by accelerating decision-making, which in turn promotes exploitative innovation. It also enhances a firm's absorptive capacity and empowers it to identify and meet new consumer demands, fostering exploratory innovation. Furthermore, this study reveals that digital transformation challenges the traditional power structures of innovation decisions, enabling formal and informal structures to become more decentralized, which promotes knowledge flows and managerial incentives and, thus, positively affects exploitative innovation. These findings provide a deeper understanding of digital transformation and innovation management.
Existing literature suggests that family ownership (FO) reduces exploratory innovation (ERI). Contrary to this conventional view, some family firms are among the world's innovation leaders. Our study aims to reconcile this discrepancy by examining the role of restricted and extended socioemotional wealth in the relationship between FO and ERI. We posit that while FO may inhibit the capacity for ERI due to rigid mental models and cognitive convergence, it fosters the willingness for ERI owing to a long-term orientation. We argue that FO exhibits an inverted U-shaped effect on ERI. Empirical evidence from 938 Chinese-listed family firms between 2011 and 2021 supports our hypothesis. Our findings indicate that FO's influence on ERI is not uniformly detrimental and that a moderate level of FO can promote ERI. Additionally, the latter generational stage (GS) attenuates the inverted U-shaped curve, implying that family firms in the latter GS may exhibit lower levels of ERI. This study offers theoretical and practical insights into FO and technological innovation research domains.
Inventors embed themselves in knowledge networks consisting of links between knowledge elements and collaboration networks with other inventors. These two networks are decoupled: Their structural features are distinct, and they jointly influence inventors’ local searches for knowledge. Using a longitudinal patent dataset comprising 12,174 observations, this study investigates the effects of two structural features of inventors in these networks—degree centrality and structural holes—on their local search behaviors. Our findings reveal that the degree centrality of inventors’ knowledge elements in the intra-organizational knowledge network contributes to the depth and breadth of their local search behaviors, while structural holes hinder such behaviors. Furthermore, the effect of degree centrality in the intra-organizational knowledge network for local searches increases when inventors hold central positions and span more structural holes in the intra-organizational collaboration network. The negative effect of structural holes in the knowledge network for local searches weakens when inventors hold central positions in the collaboration network. These findings contribute to the literature on knowledge searches by decoupling the knowledge and collaboration networks and analyzing their effects on the depth and breadth of local searches and offer practical implications to organizational managers and researchers.
Under severe competition and the pressures of regulations and stakeholders, it is important for all firms, in addition to successful peers, to gain legitimacy and maintain a competitive advantage by transitioning to ecologically sustainable business practices. By integrating information-based imitation and rivalry-based imitation theories, in this article, we investigate how access to successful peers’ information enables focal firms to engage in green innovation. Using a sample of Chinese listed firms over the period 2007–2017, we find that focal firms are likely to imitate successful peers’ green innovation behavior; we call this the “benchmarking effect.” The effect is stronger when focal firms have a high degree of directors’ network centrality or are geographically close to successful peers. These findings extend the research on who firms imitate and highlight the importance of information accessibility in promoting organizational homogenization.
Firm’s inter-regional investments are crucial carriers of capital flows
between cities, transforming information resources into innovation
capabilities. Based on the listed companies’ inter-regional investments
data and patent data in China during 2009-2018, the mechanism of the
inter-regional investments in technological catch-up and the
heterogeneity in different samples have been investigated via the two stage least squares regression. The results show that: (a) Inter-regional investments enhance the innovation capability, narrow the
technological distance, and play a more significant role than foreign
capital; (b) Technological catch-up is achieved through independent
innovation, the transmission mechanism of imitative innovation does
not hold; (c) When there is no market segmentation, the role of interregional investments on technological catch-up is realised entirely through independent innovation. Segmentation hinders the
technological catch-up process; (d) The partial mediating effect of the
manufacturing industry on technological catch-up holds, while in non�manufacturing industries, it is not significant. Inter-regional investments are important for the improvement of local innovation capacity and for China’s catching up with the world’s technological frontiers
Purpose
The investigation of organization's ambidextrous innovation is a challenge in the research studies of management sciences. As existent literature showed a positive relation between dynamic capability (DC) and innovation, few empirical studies are conducted to explain how DC impacts on the balanced and combined dimension of ambidexterity and still less on how social network moderates this relation. As a result, this paper aims to investigate and provide empirical evidence on DC’s influence on ambidexterity in the context of China.
Design/methodology/approach
By a relational model of DC, ambidextrous innovation and social network, this study has conducted multiple regression analysis on the data collected from 350 small and medium enterprises (SMEs) in mainland China.
Findings
The results show that, DC has positive influence on both the combined and balanced dimension of ambidexterity; and both the relational network and structural network play an inverted U moderating role, where the moderation of relational network is stronger than that of structural network.
Originality/value
This study provides empirical support on DC's influence on ambidexterity together with the moderation of social network.
This article investigates how the process of product imitation affects skill improvement for small- and medium-sized enterprises (SMEs) in developing countries. By distinguishing between sources of information inputs in the imitation process, we identify two types of product imitation—reproduction and adaptation. We argue that compared to reproduction, adaptation is more likely to enhance imitators’ skills. This is because adaptation requires imitators to use information from a variety of sources, which in turn creates more opportunities to gain knowledge and practice complex skills, such as trial-and-error and problem-solving. We find supporting empirical evidence by analyzing SMEs in nine developing countries. Our results indicate that SMEs can achieve skill improvement by imitating products. This finding also suggests that policies guiding SMEs toward adaptation and away from reproduction are likely to enhance SMEs’ long-term growth by enabling skill improvement.
Research Summary
Firms in technology‐based settings continuously mobilize the knowledge of individuals in the firm to execute new opportunities arising over time. Yet we have only a limited understanding of how individual‐level knowledge aggregates to shape firm‐level innovation. We use a computational model to develop a microfoundational theory of firm‐level innovation that captures both intra‐firm knowledge mobilization and inter‐firm competition. A key insight is that despite intuitions that knowledge mobilization should protect against rival imitation, knowledge mobilization can often benefit rivals more than the focal firm itself, due to a process of continuous knowledge spillover‐sharing among rivals. In addition, while knowledge‐based advantages are often thought to be temporary without some isolating mechanism, sustainable advantage may emerge under limited conditions under which knowledge‐mobilizing firms outrace rivals' imitation efforts.
Managerial summary
Managers in fast‐moving technology‐based industries innovate by mobilizing the knowledge of individuals in their firm to execute new market opportunities arising over time. A central challenge in such settings is that competitors may imitate this knowledge, thereby diminishing the advantages to the focal firm that derive from its innovations. We highlight the conditions under which such efforts at mobilizing individual knowledge within a firm can backfire and thus accelerate imitation as a result of knowledge spillover‐sharing among the firm's industry rivals. To protect themselves, innovative firms in highly complex industries can use a recombination process to outrace their imitating rivals and generate sustainable advantages.
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.
Abstract
Purpose – The purpose of this study is to investigate the relationships between exploratory/exploitative
innovation and employee creativity in the Chinese context and how these two relationships can be moderated
by an important cultural dimension – collectivism.
Design/methodology/approach – A theoretical framework was developed to explore the relationships
between exploratory/exploitative innovation, employee creativity and collectivism. Data were collected by
sending out surveys to managers and employees in various industries in mainland China. Hypotheses were
tested using hierarchical regressions.
Findings – The results show that both exploratory innovation and exploitative innovation are positively
related to employee creativity. Furthermore, collectivism negatively moderates the effects of both types of
innovation on employee creativity, despite its positive main effect.
Originality/value – This study explores the relationship between organizational innovation and
individual employee creativity in the Chinese context. This paper empirically analyzes the moderating effect
of collectivism in the relationship between organizational innovation and employee creativity. It also indicates
the factors inherent in Chinese culture that influence innovation and gives explanations from education,
subordinate relation, etc.
Do local partners' network attributes affect the survival of high-tech international joint ventures (IJV)? How does the effect of network attributes vary in different subnational institutional environments? While the classic economic explanation for IJV formation and subsequent performance draws from the resource-based view (RBV), we add the relational dimension to explain that IJV survival may be affected by local partners’ relation-specific assets within the local network. We test the effect of the local partners’ network attributes as calculated by UCINET (centrality, network status, and structural hole position) on IJV survival. We additionally assert that this relationship is moderated by subnational institutional heterogeneity. Using our sample of 125 IJV dyadic pairs of US multinational enterprises (MNEs) operating in high-tech industries and their local partners in China, we find partial support for our claims.
This study proposes and tests a theoretical framework that relates a firm’s imitation strategy and its interaction with R&D resources to incremental and radical innovation. The analysis of a panel dataset of 1381 Chinese manufacturing firms in the period 2008–2014 shows that imitation strategy is positively related to incremental innovation but has an inverted U-shaped relationship with radical innovation. More interestingly, R&D resources serve as a critical boundary condition of the imitation strategy–innovation link—they strengthen the link between imitation strategy and incremental innovation but weaken the link between imitation strategy and radical innovation.
Much of the prior research on interorganizational learning has focused on the role of absorptive capacity, a firm's ability to value, assimilate, and utilize new external knowledge. However, this definition of the construct suggests that a firm has an equal capacity to learn from all other organizations. We reconceptualize the Jinn-level construct absorptive capacity as a learning dyad-level construct, relative absorptive capacity. One firm's ability to learn from another firm is argued to depend on the similarity of both firms' (1) knowledge bases, (2) organizational structures and compensation policies, and (3) dominant logics. We then test the model using a sample of pharmaceutical-biotechnology RED alliances. As predicted, the similarity of the partners' basic knowledge, lower management formalization, research centralization, compensation practices, and research communities were positively related to interorganizational learning. The relative absorptive capacity measures are also shown to have greater explanatory power than the established measure of absorptive capacity, R&D spending. (C) 1998 John Wiley & Sons, Ltd.
Research summary : When faced with a new technological paradigm, incumbent firms can opt for internal development and/or external sourcing to obtain the necessary new knowledge. We explain how the effectiveness of external knowledge sourcing depends on the properties of internal knowledge production. We apply a social network lens to delineate interpersonal, intra‐firm knowledge networks and capture the emergence of two important firm‐level properties: the incumbent's internal potential for knowledge recombination and the level of knowledge coordination costs. We rely on firm‐level internal knowledge networks to dynamically track the emergence of these properties across 106 global pharmaceutical companies over a 25‐year time period. We find that a firm's success in developing knowledge in a new technological paradigm using external knowledge sourcing is contingent on these internal knowledge properties .
Managerial summary : Incumbent firms in high‐tech industries often face competence‐destroying technological change. In their effort to adapt and develop new knowledge in a novel paradigm, incumbent firms have several corporate strategy options available to them: internal knowledge development and a wide array of external knowledge sourcing strategies, including alliances and acquisitions. In this study, we make an effort to address a critical question: How effective is external knowledge sourcing under different internal knowledge generation regimes? We find that external sourcing strategies are less effective when firms can already internally generate new knowledge or if they have high internal coordination costs. Therefore, when considering external sourcing, managers must carefully weigh the benefits of it vis‐à‐vis its commensurate costs as the benefits of external sourcing may be overstated . Copyright © 2015 John Wiley & Sons, Ltd.
Open innovation has become an important mode for firms to improve innovation performance. If the openness is too low, it will reduce the opportunity to acquire external knowledge, while too open will increase the risk of internal knowledge leakage. Therefore, the degree of openness plays a key role in the use of open innovation to improve innovation performance. We use the openness breadth and openness depth to describe the openness of innovation. We conduct an agent-based simulation methodology to study the optimal degree of openness. Our findings show that there are great differences in the optimal degree of openness under different situations. Moreover, as the situation changes, the optimal degree of openness changes regularly. More specifically, the more a firm's knowledge network structure holes, the smaller the optimal openness breadth and the greater the optimal openness depth. The higher a firm's knowledge network centrality, the greater the optimal openness breadth and the smaller the optimal openness depth. The worse the institutional environment, the smaller the optimal openness breadth and openness depth. The fiercer the market competition, the greater the optimal openness breadth and the smaller the optimal openness depth.
The primary purpose of this article is to explore how public research and development (R&D) subsidies influence firms-level exploratory innovation, as well as the internal organizational contingencies that moderate the impact of R&D subsidies. By employing panel data of a group of manufacturing firms in Jiangsu Province from 2010 to 2014, we find a dual effect of R&D subsidies on firms’ exploratory innovation, which is shown as an inverted U-shaped pattern. This suggests that R&D subsidies within an appropriate range can facilitate firms’ exploratory innovation. Additionally, we propose that firm-level technological capabilities positively moderate this curvilinear effect; however, firms’ R&D collaborations with universities and public research institutes do not have such a moderating effect. The results of this article enrich our understanding of the impact of R&D subsidies, especially on firm exploratory innovation. Based on the findings of this article, we contribute implications on government policymaking and firm strategic technological practices.
Purpose
Although collaborative research is believed to be an important means of accessing external knowledge, research on whether taking a strategic network position benefits new product development (NPD) is inconclusive. This study aims to unravel the conditions under which taking a strategic position within a collaborative research network is conducive for a firm’s NPD.
Design/methodology/approach
Drawing on social network theory, absorptive capacity theory and knowledge recombinant studies, this study examines how strategic network positions (i.e. degree centrality and structural holes) and knowledge base cohesion (i.e. local and global cohesion) in tandem affect a firm’s NPD. A panel data set of 366 firms in the Chinese automobile sector (2002–2010) is empirically analyzed, using the panel negative binomial approach with random effects and several alternate estimation approaches.
Findings
This study reveals that, rather than the volume of a firm’s knowledge base, its cohesion determines how it absorbs and uses knowledge accrued from collaborative research for NPD. Specifically, this paper finds that centrally positioned firms have greater NPD when their knowledge bases are locally cohesive, while firms spanning structural holes have more NPD when their knowledge bases are globally cohesive.
Originality/value
Successfully transferring collaborative research outcomes into product innovation is difficult. This study contributes to the literature on strategic network positions and NPD. The findings advance the understanding of knowledge base cohesion’s moderating role in explaining how firms absorb and exploit external knowledge for internal innovation. The findings also have important implications for managers who wish to promote product innovation by engaging in collaborative research with external partners.
Purpose
With the fierce competition in a knowledge economy, knowledge-intensive enterprises (KIEs) make technological progress in their catching-up processes through implementing product innovation and process innovation. In this study, the aim is to understand the determinants of enterprise innovation type in China's catch-up environment. Further, this paper intends to deal with two related questions. First, what effect does the internal knowledge base have on KIEs' technology innovation activities? Second, considering the technology gap and technology development speed, what are the different impacts of the knowledge base on the type of technology innovation activities?
Design/methodology/approach
This paper collected data from 212 KIEs in China through a two-stage questionnaire survey, combined with statistical data for research. The hypothesis was tested by regression analysis. Specifically, descriptive statistics and regression analysis are introduced to test the hypothetical relationship between the knowledge base and technology innovation. Meanwhile, multiple regression is used to test whether there is any difference in the influence of technology gap and technology development speed on enterprise knowledge base and technology innovation. Finally, the corresponding robustness tests are done.
Findings
This study finds that in a sample of Yangtze River Delta KIEs, firms' knowledge base influences innovation types. Specifically, the knowledge base width (KBW) and knowledge base depth (KBD) positively influence process innovation, and KBD positively affects product innovation. Regarding the effects of catch-up context factors on KIEs’ innovation choice, a wide technology gap tends to positively influence product innovation in industries with high levels of KBW. Moreover, when technology development speed is high, its potential positive influence on process innovation will be more significant for industries with deeper knowledge bases.
Originality/value
This paper fills the research gap that existing studies ignore the relationship between types of technology innovation and knowledge base dimensions, especially for KIEs. First, this paper deepens the understanding of the impact mechanism of KIEs' existing knowledge base on innovation activities; the unique use of resources by enterprises is the basis of enterprises' competitive advantage and will become enterprises' competitive advantage. Second, this study indicates that against different backdrops of technology gap and technology development speed, enterprises with different knowledge bases will adopt different types of technology innovation activities. Third, this paper shows that a wider technology gap provides broader innovation space, so the technology gap plays a pulling role in KBW and product innovation, thus pushing forward enterprises' technological catch-up.
Using the theory of organizational learning and innovation, this study explores the positive effects of exploitative and exploratory learning on imitation strategy and innovation strategy and shows when these effects are strongest. This study also explores the positive effects of imitation strategy and innovation strategy on sustained competitive advantage and shows when these effects are strongest. The proposed theoretical model was tested on a cross-sectional data sample collected from industrial companies in South Korea. Analysis was conducted through component-based partial least squares (PLS) path modeling methodology. The results support the proposed hypotheses. The results confirm the complementary positive effects of exploitative and exploratory learning on both imitation strategy and innovation strategy. These effects in turn promote the achievement of sustained competitive advantages. Finally, the findings of the study, theoretical contributions, managerial contributions, limitations, and further work are discussed.
This study finds that imitation increases the productivity of laggards more than that of leaders, while innovation has the opposite effect. As firms approach the productivity frontier, the effect of imitation on productivity decreases, while that of innovation increases. The empirical evidence suggests that search costs are the mechanism underlying this effect. Firms increase their productivity by imitating productive firms. When they become more productive, search costs increase, because they have fewer opportunities to imitate.
This paper investigates how imitative innovation affects firms’ financial distress risk and how executive foreign experience moderates this relationship. Using the 2008–2017 patent application data for Chinese listed firms, we find robust evidence that imitative innovation increases firms’ financial distress risk and that executives’ foreign experience can mitigate this adverse impact. Additional tests reveal that firms conduct imitative innovation to gain competitive advantage, but this also tightens their financial constraints, leading to greater financial distress risk. Overall, our results highlight the dark side of imitative innovation and the value of executives’ foreign experience for firms operating in emerging markets that rely on imitative innovation.
Government subsidies play a vital role in enhancing firms' investment in research and development (R&D). The study's aim is to investigate the relationship between government subsidies (including government R&D and non-R&D subsidies), R&D investment and innovation performance of Chinese pharmaceutical listed companies over the period 2009-2015. The results show that government R&D subsidies can stimulate corporate R&D investment; government subsidies have no significant impact on innovation performance while R&D investment has a positive impact. In addition, we examine whether company ownership and executives' technological experience affect this relationship. We also find that there is a positive relationship between government R&D subsidies and R&D investment only in private-owned companies; R&D investment positively influences innovation performance in state-owned companies or in companies with R&D executives. This study provides some insights for managers and policymakers in making effective innovation strategies.
This paper investigates multinational enterprises (MNEs) as a potential referent for local firms making decisions on eco-innovation. By analyzing Korean innovation survey and patent data, we find local firms’ eco-innovation scope converges with that of the most profitable foreign MNEs within an industry, i.e. profitability is considered a reliable signal for imitation. The imitation tendency changes contingent on previous eco-innovation experience and innovation networks in other local firms. The degree of imitation is then negatively associated with local firms’ eco-innovation outputs. This study shows how local firms can use social proof from selected foreign MNEs to supplement their sense-making in a non-routine environment.
** Full text: https://eprints.whiterose.ac.uk/166174/1/Ha20_Forthcoming_in_ABM_Author_copy.pdf
Many challenges continue to hinder digital technologies’ adoption by small and medium scale enterprises (SMEs) in developing economies. Comparatively, there are more success stories by SMEs in emerging markets. However, most SMEs operating in the
informal sector in the emerging markets and developing economies (EMDEs) face similar challenges that inhibit the adoption of advanced technologies and innovations needed to improve business operations and re-engineer processes. This article evaluates the implementation and use of state-of-the-art technologies by SMEs in EMDEs to improve operations performance and create sustainable competitive advantages. Further, the papers in this Special Issue identify FinTech and analytical algorithms as some of the current technologies employed by SMEs in EMDEs to improve operations and processes in the manufacturing and service industries. The recognized technologies and technical innovations that seem novel in EMDEs have long existed in the advanced economies. Most state-of-the-art technologies, including cloud computing, ’big data’, and predictive analytics that can improve operations and strategic decisions, are yet to make inroads
in most EMDEs. Also, disruptive computing technologies, data analytics, and the Internet of Things (IoT) required to engineer new business models, reduce overheads, enhance competitive advantages, and digitize SMEs’ business operations remain untapped. The
absence and non-adoption of digital technologies in EMDEs explain why business activities in most EMDEs remain shut during the outbreak of SARS-CoV-2 and the community lockdown to contain the COVID-19 pandemic. The strategies to survive the ’new normal’ imposed by COVID-19 and fierce global competition includes a successful adoption of advanced technologies.
The degree to which inter-firm research and development (R&D) networks benefit a firm's exploitative and exploratory innovation depends on two factors: (1) the kind of knowledge that the firm can access from networks and (2) how the firm acquire these knowledge resources through its connections. Utilizing a knowledge-based view of the firm, we argue that related and unrelated network knowledge diversity differ in their effect on a company's innovation outcomes and that the existence of structural holes in an inter-firm R&D network has a discrepant, moderating effect on performance. Empirical analyses based on archival data from 158 Chinese automobile companies from 1996 to 2010 indicate that the inter-firm R&D network that emphasizes diversified unrelated knowledge is more beneficial for enhancing a firm's exploratory innovation outcomes. Conversely, the inter-firm R&D network that relies on diversified related knowledge can be more helpful for companies that engage in exploitative innovation. Further, structural holes are expected to be complementary to unrelated network knowledge diversity while a dense neighborhood is complementary to related network knowledge diversity in improving firm exploitative and exploratory innovation outcomes.
Purpose
The authors attempt to answer the basic questions: How is imitation tied to innovation? This question is addressed in the context of China's innovation system in the 2000s where Chinese industrial firms simultaneously implement innovation and imitation strategies in their new product developments.
Design/methodology/approach
The authors first build on lattice theory and supermodularity theory to provide a rigorous and careful mathematical proof. The authors further conduct the empirical analyses using an original data on Chinese manufacturing firms' innovation and imitation strategies in the development of new products in 2002.
Findings
This article reveals the complementarity relation between imitation and innovation strategies and identifies external knowledge search as the boundary condition that influences the extent to which two strategies reinforce each other.
Research limitations/implications
The findings of the imitation-innovation complementarity suggest that imitation is not only an indispensable strategy independent of innovation, but also is vital to the effectiveness of innovation itself.
Practical implications
The imitation-innovation complementarity finding provides some evidence for the contention that Chinese latecomers exploit the synergies of imitation and innovation, transforming themselves from imitators to innovators and vibrant competitors in the global market (Wu et al. , 2016) and, as a result, national innovation system has evolved from a state-sponsored imitation program to the imitation-innovation mixture.
Originality/value
In contrast to earlier innovation studies in which innovation and imitation are unrelated, this study reveals that imitation complements innovation, and the extent of Chinese firms' external knowledge search affects the complementary relationship between imitation and innovation. These findings add important insights to the innovation management literature and contribute empirical evidence to the interplay of innovation and imitation enhancing national innovation system.
Purpose
The aim of this study is to investigate the differential effects of pure and creative imitation on customer equity and the moderating roles of market contingency (i.e. competition intensity) and institutional contingency (i.e. enforcement inefficiency).
Design/methodology/approach
A lab experiment with 181 subjects and a survey of both senior and middle managers from 149 pharmaceutical firms in China were conducted.
Findings
Pure imitation decreases customer equity, but creative imitation increases it. Competition intensity attenuates the negative effect of pure imitation and the positive effect of creative imitation, whereas enforcement inefficiency only attenuates the negative effect of pure imitation.
Practical implications
The findings have significant implications for managers seeking to implement product imitation strategies in emerging economies. They can help managers understand the effects of two kinds of imitation strategies on customer equity. Furthermore, this shows that product imitation strategies should be aligned with various market and institutional contingencies to achieve better performance.
Originality/value
The authors distinguished between pure and creative imitation. Whereas previous studies have investigated the effects of pure and creative imitation on financial and market performance, the focus was on their differential effects on customer equity and the moderating roles of environmental contingencies at the market and institutional levels.
While organizational innovation is considered crucial for firms performance, its role as a type of intangible innovation in new product development remains under-explored in the literature. As such, this paper explores the impacts of organizational innovation on both product innovation and imitation for Chinese manufacturing firms based on original survey data. Latent class analysis is used to identify the classification of organizational innovation and their various characteristics. The results indicate a five-pattern of organizational innovation that range from low to high levels for the sample firms. Further, the multinomial treatment effects estimation suggests that middle- to high-level organizational innovation has a significant impact on product imitation intensity, demonstrating that knowledge management and standardization play important roles in facilitating product imitation. However, only a superior level of organizational innovation shows a significant effect on the intensity of product innovation, implying that the transition from product imitation to innovation requires a comprehensive improvement in organizational design.
Taking the data of 20,863 patents in the field of Artificial Intelligence between 2000 and 2018 as an example, this paper examined the relationships among organisations’ knowledge structure, network structure, exploratory innovation and exploitative innovation. The results show that organisations’ knowledge combinatorial potential and knowledge diversity have positive effects on both exploratory innovation and exploitative innovation. Organisations’ degree centrality and structural holes in the collaboration network can partly mediate the relationships between their knowledge structure and exploratory and exploitative innovations.
Previous studies emphasized the importance of balancing exploitation and exploration to achieve sustainable success in organizations in terms of organizational learning and adaptation. These studies also attach great importance to the antecedent and moderate, mediating, and control variables of innovation ambidexterity. However, only few researchers addressed the mechanisms or criteria of resource allocation for establishing a balance between exploitation and exploration. Previous studies showed that the allocation proportion of enterprise resources is associated with performance gap between the targeted performance and actual performance. These studies also showed that exploitative innovation and exploratory innovation can increase the level of knowledge and promote performance development. On the basis of the behavioral theory of the firm and resource-based view, this article investigates that resource allocation is affected by the relative performance rather than absolute levels of performance and how firm performance evolves from the creativity revelation processes through knowledge by balancing exploration and exploitation for established firms. A simulation is conducted. The result shows that exploratory innovation-oriented firms have better long-term performance than exploitative innovation-oriented firms. For exploratory innovation-oriented firms, the more sensitive on the performance gap, the better long-term performance, but for exploitative innovation-oriented firms, the less sensitive on the performance gap, the better long-term performance.
Purpose
The purpose of this paper is to investigate the effects of internal and external sources of knowledge on frugal innovation (FI), and to what extent this relationship is strengthened/weakened, authors also analyzed the moderating role of market and technological turbulence.
Design/methodology/approach
This is an empirical research. Data were collected from 382 SMEs through questionnaire survey, applied SmartPLS technique to analyse the data.
Findings
Findings revealed the significant effects of internal and external sources of knowledge on FI. To what extent this relationship is strengthened/weakened, the moderating role of market and technological turbulence was analysed. Data revealed that the moderation of technological turbulence strengthens the effects internal and external sources of knowledge had on FI. Market turbulence strengthened the effects of external sources of knowledge but surprisingly weakens the effects of internal sources of knowledge on FI.
Practical implications
Findings provide valuable and timely insights for the modern managers as well. Managers who operate in SMEs will have to understand that how knowledge from internal and external sources can be gathered and utilized for producing frugal products. They also will have to weigh which source of knowledge is more important when there is market and technological turbulence.
Originality/value
Sustainable and social issues emerge mainly due to scarcity of available resources. Firms seek to solve such pressing issues through improvisation in resources. However, frugal products assist firms to significantly contribute in society and sustainability. Although prior research has discussed the importance of knowledge for innovation, yet the effects of sources of knowledge and role of contingencies mostly remain unexplained puzzle. This study contributes to knowledge-innovation literature by examining the missing link between different sources of knowledge and FI and how the moderation of technology and market turbulence strengthen/weaken this relationship. Authors believe that it also helps to comprehend FI’s enabling factors through which firms can capitalize upon, and solve the pressing sustainable and social issues.
Employing knowledge-based theory, this study builds upon social network theory and investigates the influence of knowledge networks on firms' innovation performance. This study incorporates the structural view of social networks and interorganizational interactions to develop the dimensions of knowledge networks, as well as to demonstrate the effects of firms' knowledge integration capability between knowledge networks and innovation performance. Investigating high-tech firms in Taiwan science parks, this study employs the social network research method to establish the boundaries of knowledge networks. The results show that each dimension of knowledge networks improves firms' innovation performance, and that firms' knowledge integration capability has a fully mediating effect on the relationship between knowledge cognition and innovation performance, but only a partial mediating effect on the relationships among firms' network centrality, knowledge heterogeneity, and innovation performance. Consequently, this study provides suggestions and comments for firms on how to engage in inter-organizational cooperative relationships.
Although extant literature has long argued that firm embeddedness within knowledge networks increases innovation, we know much less about how interactions across multiple knowledge networks jointly influence learning and innovation outcomes within firms. This paper contributes to our understanding of global innovation in multinational corporations (MNCs) by exploring how competing tensions across parent, hostcountry, and third-country knowledge networks in terms of knowledge domain diversity and dominance, organizational bias, and knowledge relevance perceptions influence innovation outcomes. Empirical results from a comprehensive panel of U.S. MNCs reveal different "preferred" combinations of high and low embeddedness across parent, hostcountry, and third-country knowledge networks for incremental versus radical innovation outcomes, reflecting how competing tensions across knowledge networks can limit or enhance knowledge search for diverse knowledge and influence innovation outcomes in the foreign operations of MNCs.
Purpose
Existing research has demonstrated that the innovation implications of structural holes are inconsistent. The diverse and broad resources associated with structural holes facilitate innovation. On the contrary, brokerage will also hinder trust and increase the opportunism behaviors among partners, which will damage innovation. Inspired by the conflicting conclusions, the purpose of this paper is to analyze the roles of structural holes on exploratory innovation and exploitative innovation.
Design/methodology/approach
To test the model, the paper used a panel of 305 US computer focal firms and 6,894 alliances from the period spanning 1993 to 2004, and adopted the Heckman two-stage selection procedure in predicting the results.
Findings
The results show that structural holes help firms to develop exploratory innovation while negatively impacting exploitative innovation.
Originality/value
This study offers precise insights on inconsistent understandings between structural holes and innovation by differentiating exploratory innovation from exploitative innovation. Furthermore, it contributes to the burgeoning literature on exploration and exploitation from the network perspective.
This paper evaluates prospective technology areas, development strategies, and various innovation resources in China's pharmaceutical sector through the use of a hierarchical decision model. The results indicate that although domestic SMEs are the major preferred innovation alternative, it is followed closely by foreign MNCs. The sensitivity analysis indicates that the effectiveness of policy decisions are influenced by certain high technology areas. Recombinant therapeutic proteins, recombinant vaccines, and monoclonal antibody technologies are identified as the major areas that will influence the priority of innovation resources. The research crafts a research framework to formulate innovation strategies in dealing with the uncertainties of technology development and policy decisions in the biopharmaceutical industry.
This study examines the extent to which foreign competition affects the innovation performance of domestic firms through imitation, given firms' absorptive capacity. In analysing longitudinal firm-level data from the UK, we find a mediating effect of imitation on the relationship between foreign competition and local firms' innovation performance, and an inverted U-shaped relationship between imitation and the innovation performance of local firms. Our findings further reveal that absorptive capacity moderates the mediating effect of imitation, diminishing innovation gains at moderate levels of imitation and mitigating the diminishing innovation performance at high levels of imitation.
Nanotechnology is frequently heralded as an emerging strategic industry in developed and developing countries. However, little is known about the catch-up of companies in emerging industries like the nanotechnology industry in developing countries, such as China. From the perspective of process-based innovation proposed by Linton and Walsh, this paper explores the catch-up process and role of process-based innovation in nanotechnology companies. The research reveals the catch-up process in emerging industries in developing countries is different from the original Utterback and Abernathy (U–A) model and Kim’s model, the reverse U–A model, and confirms the model proposed by Linton and Walsh. Innovation in the catch-up process in emerging industries in developing countries follows the same stages as that in advanced countries, but there is a time delay in the start of commercialisation. The research showcases a large role for competitiveness derived from owning critical technology in the production process (process-based innovation) in the catch-up process. This research contributes to the catch-up theory and catch-up in emerging industries, such as nanotechnology industry.
Knowledge networks consisting of links between knowledge elements and social networks composed of interactions between inventors both play a critical role for innovation. Taking a multilevel network approach, this study integrates research on the two types of networks and investigates how the knowledge network of a firm influences work-related interactions among its inventors. To this end, we associate inventors with specific knowledge elements in the firm’s knowledge network and examine how this association affects the inventors’ popularity and activity in a work-related advice network. Empirically, we combine survey data on 135 inventors working in a German high-tech firm with information derived from the firm’s 1031 patents. Results from multilevel exponential random graph models (ERGM) show that different dimensions of knowledge derived from the firm’s knowledge network shape the transfer of advice among inventors in unique ways. Thus, our study demonstrates how structural features of the firm’s knowledge stock influence interpersonal interactions among its inventors thereby affecting the intra-organizational diffusion of knowledge and the recombinant possibilities of the firm.
Although innovation orientation has been documented as the primary strategy to support a firm's growth, imitation orientation, which represents an alternative strategic and cultural focus, has begun to receive attention. However, empirical evidence as to how each orientation is shaped by environmental turbulence and whether it is fruitful to adopt both orientations simultaneously is lacking. This study attempts to close such an important research gap by surveying 294 managers at 147 firms in China. Results indicate that dysfunctional competition and technological turbulence, two critical environmental forces in emerging economies, influence the extent to which a firm adopts these two strategic orientations. The results also suggest that firms should stay focused on one strategic orientation rather than both to optimize their performance outcomes.
This research examines the roles of government policies within the national innovation system (NIS) in promoting effective social entrepreneurial action and enhancing economic growth in rural sectors. We investigate government's role in promoting effective social entrepreneurial action within the NIS framework in rural sectors through a change in technology policy and NSI structure. We analyze longitudinal data that tracks China's NIS, government-led R&D investments and labor mobility and rural economic growth during the 1998–2009 period. The results provide robust support for the positive effect of the NIS on rural economic growth, and this positive relationship varies across the coastal and interior regions of China. The idea of this perspective piece is, the positive impact is stronger for high levels of labor mobility and R&D expenditure, especially for rural areas in China.
This paper uses Red Queen competition theory to examine competitive imitation. We conceptualize imitative actions by a focal firm and their rivals along two dimensions: imitation scope, which describes the extent to which a firm imitates a wide range (as opposed to a narrow range) of new product technologies introduced by rivals, and imitation speed, namely the pace at which it imitates these technologies. We argue that focal firm imitation scope and imitation speed drive performance, as well as imitation scope and speed decisions by rivals, which in turn influence the focal firm performance. We also argue that the impact of this self-reinforcing Red Queen process on firms' actions and performance is contingent on levels of product technology heterogeneity - defined as the extent to which the industry has multiple designs resulting in product variety. We test our hypotheses using imitative actions by mobile phone vendors and their sales performance in the UK from 1997 to 2008.
Today firms extensively use external knowledge from interfirm knowledge networks for their new product development (NPD). In light of this phenomenon, scholars and managers often believe that a higher centrality in interfirm knowledge networks is good for absorbing external knowledge and improving NPD performance. Since knowledge network centrality can be measured from different perspectives, however, we propose that some types of centrality might do more harm than good for NPD. Using a panel data set from the U.S. pharmaceutical industry, we empirically examine the impacts of three measures for knowledge network centrality (i.e., degree centrality, closeness centrality and eigenvector centrality) on NPD performance. We find that degree centrality in an interfirm knowledge network is positively associated with subsequent NPD performance. Counter-intuitively, closeness centrality and eigenvector centrality in an interfirm knowledge network have negative impacts on subsequent NPD performance. Taken together, our findings remind the danger of oversimplifying the complex impact of knowledge network centrality on innovation.
Research summary
While firms tend to build on their own knowledge, we distinguish between depth and breadth of local search to investigate the drivers of these behaviors. Given that inventors in a firm carry out the knowledge creation activities, we strive to identify inventors responsible for these behaviors by employing the notion of an intra-firm inventor network. A longitudinal examination of 14,575 inventors from four large semiconductor firms using patent data supports our hypotheses that the reach of inventors in the intra-firm network and their span of structural holes have independent and interactive effects on these two types of local search behaviors. These findings have implications for research on exploitation and exploration, organizational knowledge, knowledge networks, and micro-foundations.
Managerial summary
Large amounts of knowledge may reside within firm boundaries, and managers are interested in understanding who may leverage this knowledge to generate novel ideas. We focus on collaborations among knowledge workers to address this question. Using the collaborations among all knowledge workers in a firm, we show that those that have higher reach to all others and those who form bridges to connect unconnected groups of workers tend to leverage not only more organizational knowledge but also knowledge that is more dispersed in the organization. Managers could use these insights to shape the use of organizational knowledge by firm inventors, and also to make decisions about granting or withholding access to internal knowledge platforms for knowledge workers.
Drawing on insights from macro- and microlevel research, I develop and test a theory of how the makeup of firms' local environments influences their ability to generate innovations. I propose that although geographic proximity to industry peers can enhance performance, such effects are moderated by intraorganizational network structures. Data on collaborations among inventors and the geographic locations of 454 US companies active in nanotechnology R&D between 1990 and 2004 are used to show that as proximity to industry peers decreases-and knowledge spillovers become less common-inefficient networks are beneficial because they create and sustain diversity internally. For firms with high proximity, more cohesive network structures that facilitate information processing are desirable.
Innovations of organizations are doubly embedded in knowledge networks constituted by coupling among knowledge elements and in social networks formed by collaborative relationships among organizations. This study explores the structural properties of such relationships and their possible influences on organizational innovations in terms of exploitation and exploration in the emerging nano-energy field. Results indicate that the knowledge networks and the technology-based collaboration networks in the nano-energy field are decoupled and that they have different degrees of integration. Some structural features of knowledge and collaboration networks influence organizations' exploitative and exploratory innovations in diverse ways. Firstly, direct ties of an organization's knowledge elements in a knowledge network have an inverted U-shaped effect on its exploitative innovation, which is not the case in exploratory innovation. Direct ties in a collaboration network have an inverted U-shaped effect on both its exploitative and exploratory innovations. Secondly, indirect ties of an organization's knowledge elements in a knowledge network affect its exploitative innovation, but not its exploratory innovation. However, indirect ties in a collaboration network affect exploratory innovation, but not exploitative innovation. Thirdly, non-redundancy among ties in a knowledge network exhibits the opposite effect, hindering exploitative innovation, but favoring exploratory innovation. By contrast, non-redundancy among ties in a collaboration network favors exploitative innovation, but shows a non-significant effect on exploratory innovation.
This paper analyzes how imitation can be a catalyst for innovation-a benefit that is often overlooked in the literature. My research shows that a process of learning to innovate occurs as technology diffuses from a more advanced country to a less developed country; therefore, increasing the recipient country's ability to innovate. I find that the efficiency of labor in the R&D sector of the economy determines whether a country learns how to innovate or not. My research predicts that developing countries that have a healthier and more educated workforce can benefit the most from technology diffusion and are more likely to transition from imitating to innovating. On the other hand, countries that have less efficient R&D workers will continue to imitate products from more developed countries instead of inventing new products. Both the level and growth rate of output and TFP increase if a country manages to transition from imitation to innovation. Examining the dynamics that exist between imitation, innovation, and economic growth is important because it can lead to more effective industrial policy. As the results from this paper show, imitation is beneficial and should be supported and encouraged until it becomes feasible and makes sense economically for a country to switch to innovation. Countries that are dependent on technology diffusion should focus on improving the efficiency of their R&D workers if they want to learn how to invent new products. All of the theoretical results of the model are substantiated by empirical evidence.
Innovation in firms is doubly embedded: in a social network of collaborations between researchers, and in a knowledge network composed of linkages between knowledge elements. The two networks are decoupled. Their structural features are distinct and influence researchers' exploratory innovation differently. Using the patent data of a leading U.S. microprocessor manufacturer, we constructed the firm's collaboration and knowledge networks, and examined the effects of two structural features in the two networks-structural holes and degree centrality-on researchers' exploratory innovation. Our findings show that a researcher with knowledge elements rich in structural holes in the knowledge network tends to explore fewer new knowledge elements from outside the firm, while structural holes in the collaboration network increase exploratory innovation. The average degree centrality of a researcher's knowledge elements in the knowledge network has an inverted-U-shaped relationship with his or her exploratory innovation, while degree centrality in the collaboration network has a negative effect. This study suggests that knowledge and social networks influence where researchers search for discoveries.