Impact Of Technological Diversity On Innovation Performance In Inter-Firm Network Of China’s Automobile Industry

Studies on innovation are attracting a lot of researchers all over the world due to its crucialrole in today’s competitive world. In the same time networks and clusters are relatively new as aresearch subject In our paper we made an attempt to ifnd the effect of two main relaitonships. Oneis the relationship between technological diversity and innovation performance and another one isthe relationship between network indexes and innovation performance. First, we have made aproper literature review to ifnd evidences rfom previous researches and made deep analyses of thetarget sample industry. We have collected the data on innovation performance for59ifrms inChina’s automobile industry and calculated the technological diversity index. To find the networkindexes we have constructed adjacency matirxes based on alliance data. For our灵search we havef-chosen China’s automobile industry network as an example, for the reason that Chinese automobileindustry showed tremendous growth in recent decade and is fit to research scope which we areconducting. We used UCINET sotfware program to get the data regarding network properties. Atferwe ran the negaitve binomial regression model on Gretl software program and constructed9models,with total of16vairables to use them in different combinations. We found that correlaiton betweentechnological diversity and innovation performance has an inverse U-shape form. We also analyzedthe relationship between innovation performance and four network centrality measures and oneclustering coeiffcient. According to our new findings ifrms in the network with more total numberof connections and firms with more connections with well-connected firms have better innovationpefrormance. We found that there is no effect on innovation performance when ifrms have a shotrpath length between nodes in the network and when firms have capability to pass information fast.Also we found that strong local clustering has a negative effect on innovation performance. Finally,we made one more additional test and found that, when firms have a low technological diversitythey can have better network position. We made some recommendations and conclusions rfomresults，which are expected to be useful for scholars and researchers, for CEOs and managersoperating in fields where innovation is important and for subjects who are busy in China’sautomobile industry in their decision making process.