Power-leveraging paradox and firm innovation: The influence of network power, knowledge integration and breakthrough innovation

Abstract

Firm innovation may benefit from the power advantage within an innovation network, yet too much power may be counterproductive. In this study, we aim to reconcile this paradox and explore how firms can come up with more breakthrough innovations by leveraging power in an innovation network. Specifically, we conceptualize network power and investigate its impacts on breakthrough innovation. Building on the resource-based view and resource dependence theory, we first identify two types of network power, namely, knowledge power and relational power. We then explore the relationships between these two power types and breakthrough innovation, as well as the mediation effect of knowledge integration on the relationships. Survey data from 233 Chinese high-tech companies demonstrate that both knowledge power and that relational power have inverted U-shaped relationships with breakthrough innovation, and knowledge integration partially mediates the above relationships. Our study extends power bases in an innovation network to knowledge and relational ties, reconciles the power-leveraging paradox in explaining innovation issues of firms, and reveals the mediation mechanism of knowledge integration. Our findings also offer some valuable implications for managers.