Network-independent partner selection and the evolution of innovation networks
Joel Baum, Robin Cowan & Nicolas Jonard
#2009-022
Empirical research on strategic alliances has focused on the idea that
alliance partners are selected on the basis of social capital
considerations. In this paper we emphasize instead the role of
complementary knowledge stocks (broadly defined) in partner selection,
arguing not only that knowledge complementarity should not be
overlooked, but that is may be the true causal force behind alliance
formation. To marshal evidence on this point, we design a simple model
of partner selection in which firms ally for the purpose if learning and
innovating, and in doing so create an industry network. We abstract
completely from network-based structural and strategic motives for
partner selection and focus instead on the idea that firms' knowledge
bases must "fit" in order for joint learning and innovation to be
possible, and thus for an alliance to be feasible. The striking result
is what while containing no social capital considerations, the simple
model replicates the firm conduct, network structure, and contingent
effects of network position on performance observed and discussed in the
empirical literature.
Keywords: Network formation and dynamics; Innovation; Knowledge;
Alliances
JEL: D8, D2, L14, L2, O3
UNU-MERIT Working Papers
ISSN 1871-9872