Network Embeddedness and the Exploration of Novel Technologies: Technological Distance, Betweenness Centrality and Density

Abstract

In this paper we analyze the innovative performance of alliance networks as a function 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, apart 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 industry.

Keywords: innovation networks, cognitive distance, centrality, density

JEL Classification: O31, O32, L14, L24, L25