Knowledge Sharing Strategies and Innovation: The Impact of Business Group Affiliation in an Emerging Economy

Abstract

Business groups provide a setting where affiliated firms, connected with various ties, share knowledge and enhance their innovative capabilities. The relations between knowledge sharing and innovation have been investigated in various contexts; however, whether firms connected with a business group utilize knowledge more than independent firms do in fostering innovations has been addressed to a lesser extent. Therefore, using survey data from 128 Turkish business group affiliated and independent manufacturing firms, this study examines the impact of explorative knowledge and exploitative knowledge sharing strategies on firms’ innovative activities and the moderating effect of business group affiliation in this relation. The findings indicate that while explorative and exploitative knowledge sharing enhance innovation, firms affiliated with business groups benefit less from both types of knowledge sharing than independent firms in terms of innovation. This study contributes to the business groups and knowledge research by examining whether groups create value for affiliated firms when firms operate in an emerging economy. The results of this study have policy and strategy implications in emerging economies and in the context of business groups.