Abstract
CEOs and the influence of their social networks have been considered as important drivers for firm innovation. Yet, both theories and empirical evidence are lacking. To advance this stream of research, our paper fills the gap by exploring how bonding and bridging social capital influence exploratory innovation in firms. Through an examination of executive social ties and patent‐based technology indicators, our findings reveal nuanced relationships: Excessive bonding social capital exponentially hampers exploratory innovation due to information overload, while bridging social capital enhances exploratory innovation and mitigates over‐bonding effects (inverted U‐shape). We test our hypotheses with a sample of 7,540 firm‐year observations of public U.S. firms from 2000 to 2014. Our study not only contributes to research on strategic leadership, social capital, interfirm networks, and technological innovation but also offers important managerial implications. It suggests that CEOs and R&D directors foster balanced social networks in their pursuit of enhanced innovation management.
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