How Do Firms’ Knowledge Base and Industrial Knowledge Networks Co-Affect Firm Innovation?

Abstract

Firms’ knowledge base is one of the key antecedents of firm innovation. While extant literatures identify diversification and depth of firms’ knowledge base as the important inputs of firm innovation, coherence of firms’ knowledge base reflecting the relatedness of knowledge base is largely neglected. This article goes a further step and points out that coherence of firms’ knowledge base will co-affect with diversification or depth of firms’ knowledge base to foster firm innovation, because it improves the efficiency of knowledge combination and integration. Moreover, degree centralization of industrial knowledge networks, as a characteristic of industrial knowledge base, moderates the abovementioned relationships by offering technological combination opportunities in the industry and helping firms break cognitive inertia. Based on patent data of 76 global firms from three-dimensional printing, information and communication technology, wind energy, and lithium battery industries during the period of 1993–2013, the analysis results show that coherence of firms’ knowledge base positively moderates the relationship between diversification of firms’ knowledge base and firm innovation. Furthermore, degree centralization of industrial knowledge networks, together with coherence of firms’ knowledge base, strengthens the positive relationship between knowledge diversification and firm innovation. Theoretical and practical suggestions about firms’ knowledge management were discussed.