Exploratory and exploitative innovation performance contingent on alliance ego-network patterns

Abstract

This study examines how the pattern of a firm's alliance ego–network, as well as that of its partners, may have a contingent effect on the firm's patenting behaviour for exploratory and exploitative innovation. The research data came from 1894 strategic alliances by 455 biotechnology firms and their patents in the period 1986–1999. The study concluded that centrality in the whole alliance network is beneficial to patenting within many secondary classes (i.e., exploitative innovation) because it enables experiential search for knowledge, whereas a focal firm's partners' centrality is beneficial to patenting across many primary classes (exploratory innovation) because it enables cognitive search for knowledge. Experience in making alliances was also found to be significant for all types of innovation output, indicating that network pattern contingency and alliance experience as a capability have to be present simultaneously to deliver enhanced innovation performance.