Publications Networks, alliances and service innovation

Journal articles

Lokshin, B., Hagedoorn, J. & Letterie, W.A. (2011). The Bumpy Road of Technology Partnerships: Understanding causes and consequences of partnership mal-functioning. Research Policy, 40(2), 297-308.

Research on technological partnerships has traditionally sought explanation of their high failure rates in partner characteristics and relationship features. This study introduces the notion of a ‘bumpy road’ in technology partnerships which refers to undesired outcomes such as ‘partnership mal-functioning’ and ‘instability’ to the degree to which innovation activities are hampered. We explain how firm-level strategies can reduce the probability of a ‘bumpy road’ in partnerships. We also assess the impact of this ‘bumpy road’ on innovative performance. We find that firms that excel in diversification of external activities (in terms of different types of partners) perform best. Moreover, a persistent product oriented innovation strategy geared at developing new products, new markets, or higher product quality will yield more stable partnership outcomes. Our results confirm that engagement in partnerships is beneficial for innovative performance. However, firms that experienced a ‘bumpy road’ in their technological partnerships have to pay a price in terms of a negative effect on their innovative performance.

Baum, J., Cowan, R. & Jonard, N. (2010). Network-independent partner selection and the evolution of innovation networks. Management Science, 56, 2094-2010.

Empirical research on strategic alliances has focused on the idea that partners are selected on the basis of social capital considerations. In this paper we emphasize instead the role of complementary knowledge stocks and knowledge dynamics, which have received surprisingly limited attention relative to social capital as forces behind the formation and dynamics of innovation networks. To marshal evidence in this regard, we design a simple model of partner selection in which firms ally for the purpose of learning and innovating, and in doing so create an industry network. We abstract completely from network-based structural and strategic motives for partner selection and focus instead on the idea that firms’ knowledge bases must “fit” for joint learning and innovation to be possible, and thus for an alliance to be feasible. The striking result is that, despite containing no social capital considerations, this simple model replicates the firm conduct, network structure, and contingent effects of network position on performance observed and discussed in the empirical literature

Akcomak, I.S. and B. ter Weel, 2009. Social capital, innovation and growth: Evidence from Europe, European Economic Review, 53(5), pp. 544-67.

This paper investigates the interplay between social capital, innovation and per capita income growth in the European Union. We model and identify innovation as an important mechanism that transforms social capital into higher income levels. In an empirical investigation of 102 European regions in the period 1990-2002, we show that higher innovation performance is conducive to per capita income growth and that social capital affects this growth indirectly by fostering innovation. Our estimates suggest that there is no direct role for social capital to foster per capita income growth in our sample of European Union countries.

Carree, M.A. & I. Verheul, 2009. Time allocation by the self-employed: the determinants of the number of working hours in start-ups, Applied Economics Letters, 16 (15), pp. 1511-1515.

This article examines determinants of working hours by self-employed, explicitly discriminating between preference and productivity effects. A simple model of working hours is derived, not requiring expected profit data. The model is estimated using data from a Dutch survey of 1350 start-ups. Outsourcing and number of employees appear related to both preference and productivity. The model has out-of-sample predictive power for the number of working hours

Santarelli, E., M.A. Carree & I. Verheul, 2009. Unemployment and firm entry and exit: an update on a controversial relationship, Regional Studies, 43 (8), pp. 1061-1073.

Unemployment and firm entry and exit: an update on a controversial relationship, Regional Studies. The present study explores the relationship between unemployment and subsequent firm entry and exit for 103 Italian provinces for the period 1997-2003. Two models are estimated. The first model concentrates on unemployed individuals starting or closing a business in the province in which they live. The second model incorporate cross-border effects by taking into account possible start-ups by unemployed individuals from adjacent provinces. Findings show that a positive effect of unemployment on net entry is not due to a positive ‘push’ effect on entry, but rather to a negative effect of unemployment on firm exit. This indicates a lack of dynamics in the Italian labour market.

Vanhaverbeke, W., Gilsing, W., Beerkens, B., Duysters, G., 2009. The role of alliance network redundancy in the creation of core and non-core technologies. Journal of Management Studies, 46(2), p. 215-244.

This paper studies the effect of a focal firm, and its partners local alliance actions, on the creation of technological innovations by the former. More specifically, we study how two types of redundancy in a focal firm’s ego network affect its ability to create new technologies in its technology core areas (exploitation) and/or non-core areas (exploration). We analyse this empirically in three different industry settings: chemicals, motor vehicles, and pharmaceuticals. One of our key findings is that individual firms can indeed boost both types of innovative output by shaping the degree of redundancy in their local alliance network, but that the way in which this should be done differs between the creation of core and non-core technologies. Next, we find that it is very useful to unpack the rather abstract notion of redundancy into more specific types of redundancy in ego networks. Overall, these findings reflect an action-oriented view on the role of individual firms in collaborative networks, which may complement the dominant view in the alliance literature emphasizing the role of the overall network structure and firms network position within it.

Carree, M., Thurik, R, 2008. The lag structure of the impact of business ownership on economic performance in OECD countries. Small Business Economics, 30, p. 101-110

This paper investigates the impact of changes in the number of business owners on three measures of economic performance, viz. employment growth, GDP growth and labor productivity growth. Particular attention is devoted to the lag structure. The analysis is performed at the country level for 21 OECD countries. Our results confirm earlier evidence on three stages in the impact of entry on economic performance: an initial direct positive effect, followed by a negative effect due to exiting capacities and finally a stage of positive supply-side effects. The net effect is positive for employment and GDP growth. Changes in the number of business owners have no effect on labor productivity.

Gilsing, V., Nooteboom, B., Vanhaverbeke, W., Duysters, G., van den Oord, A., 2008. Network embeddedness and the exploration of novel technologies: Technological distance, betweenness centrality and density. Research Policy, 37, p. 1717-1731.

This paper aims to understand better the innovation potential of a firm’s alliance network. Here we analyze the role of an alliance network in terms of the technological distance between partners, a firm’s network position (centrality) and total network density. We study how these three elements of an alliance network, separately and in combination, affect the “twin tasks” in exploration, namely novelty creation on the one hand and its efficient absorption on the other hand. For an empirical test, we study technology-based alliance networks in the pharmaceutical, chemical and automotive industries. Our findings indicate that successful exploration indeed seems to require a delicate balance between these two exploration tasks. A second conclusion is that different network positions yield different pay-offs in terms of the number of explorative patents. In other words, success rates for exploration are not spread equally across firms. However, position alone does not tell the full story. Our empirical findings clearly indicate that exploration success also depends on the other two dimensions of embeddedness, namely technological distance and network density. The three elements of network embeddedness need to be considered jointly in order to understand their complementary effects on both novelty creation and absorptive capacity.

Lei, J. de Ruyter, K., Wetzels, M., 2008. Consumer responses to vertical service line extensions. Journal of Retailing, 84(3), p. 268-280

Vertical line extensions extend an established brand to products at different price/quality points. In this study, we examine consumer evaluations of vertical service line extensions and the feedback effects of these extensions on the parent brand. Findings of two empirical studies in the hotel industry indicate that consumers perceive higher risks in step-up extensions than in step-down extensions, which consequently influences their evaluations of the extensions. This effect of extension direction is also found to be moderated by risk relievers such as service guarantee and consumers’ prior knowledge in the service category. Furthermore, we found that a parent brand receives more positive evaluations after the introduction of a step-up extension than that of a step-down extension.

Letterie, W., Hagedoorn, J., van Kranenburg, H., Palm, F., 2008. Information gathering through alliances. Journal of Economic Behavior & Organization, 66, p.176-194

The effect of a firm’s uncertainty regarding technological development on the formation of alliances is examined, and it is shown that this uncertainty is positively related to the number of alliances. However, higher uncertainty also makes the firm less likely to ally with others if the collected information is redundant. The higher the similarity between the technological regimes of potential alliance partners, the lower the incentive to ally. Also direct ties are preferred to indirect ones if uncertainty is high since direct ties yield more accurate information than indirect ties.

Lokshin, B., Belderbos, R., Carree, M., 2008.The productivity effects of internal and external R&D: Evidence from a dynamic panel data model. Oxford Bulletin of Economics and Statistics, 70 (3), p.399-430.

We examine the impact of internal and external R&D on labour productivity in a 6-year panel of Dutch manufacturing firms. We apply a dynamic panel data model that allows for decreasing or increasing returns to scale in internal and external R&D and for economies of scope. We find complementarity between internal and external R&D, with a positive impact of external R&D only evident in case of sufficient internal R&D. These findings confirm the role of internal R&D in enhancing absorptive capacity. The scope economies are accompanied by decreasing returns to scale at high levels of internal and external R&D. The analysis indicates that productivity grows by increasing the share of external R&D in total R&D.

Mathwick, C., Wiertz, C., De Ruyter, K., 2008. Social capital production in a virtual P3 community. Journal of Consumer Research, 34, p. 832-849.

The purpose of this study is to examine the relational norms that determine social capital—an intangible resource embedded in and accumulated through a specific social structure. The social structure examined in this study is a virtual community created through text-based conversations oriented toward peer-to-peer problem solving (P3). Empirical results support the conceptualization of social capital as an index composed of the normative influences of voluntarism, reciprocity, and social trust. Membership length was found to moderate the virtual P3 community experience. Qualitative analysis of the community dialogue provides additional support for the characterization of virtual P3 activity as community based.

Articles published in previous years can be found through the pages Fellows and Affiliates.
More information on this research theme can be found here.