Who Makes You Central?

Abstract

The importance of network centrality for the success of international start-ups has been frequently emphasized. Research so far has however been mute regarding the question of how firms can increase their network centrality. This paper applies a knowledge-based framework to analyze changes in the structural position of firms within their research network. Analyzing longitudinal event history data for the complete German biotech population for 1995 till the end of 2006 our findings show that the prior international alliance history matters for the status within a firms network. Alliances with international partners as well as alliances with partners from a variety of countries enhance the subsequent movement towards a more central position in the research network. However, multi-partner alliances inhibit the subsequent movement towards a central position, pointing to challenges in managing a portfolio of simultaneous alliances. The findings emphasize the necessity for a young firm to enlarge its experience with international alliances from a variety of countries but to concentrate its efforts with regards to the number of simultaneous partners.