Effects Of Network Position And Absorptive Capacity On Firms' Innovative Performance

When the knowledge base of an industry is both complex and expanding and the sources of expertise are widely dispersed, the locus of innovation will be found in networks of learning, rather than in individual firms. It's an effective method for many companies to enhance innovative performance by getting resources needed in innovation process from external network by virtue of cooperators.Then, how can a firm gain useful resources from other firms effectively to enhance its innovative performance? This paper suggests that a firm's network position and internal absorptive capacity are critical to answering this question. Employing two important theoretical framework—social network theory and absorptive capacity theory, this paper probes the mechanism of network position and absorptive capacity in the process of innovative performance enhancement. On that basis, theoretical model and hypothesis are raised. The top 100 Chinese firms in electronic information industry are used as samples to test the theoretical model and hypothesis raised. By analyzing the detail information of 74896 patents applied by the 100 samples, the index system of innovative performance measurement is established. The innovative performance of 100 samples is measured by this index system and the measurement model based on osculating value method. Furthermore, the external network of the 100 samples is constructed by analyzing the mapping between co-patents and their patentees.8447 co-patents applied by the samples are used as ties of the external network. Based on the result of innovative performance measurement and the external network of the samples,10 multiple linear regression models are constructed to test the theoretical model and hypothesis. Theoretical and empirical analysis is done and some conclusions can be drawn as follows:(1) Network position has significant positive correlation with innovative performance. There are 2 kinds of network position—prominent position and entrepreneurial position in the same network. The empirical results suggest that both network positions have significant positive correlation with innovative performance, which means occupying prominent position or entrepreneurial position will promote firm's innovative performance. This conclusion provides empirical support for firms to enhance innovative performance by occupying excellent network position.(2) Absorptive capacity is positively related to innovative performance. Firms with a high level of absorptive capacity are likely to harness new knowledge from other firms to help their innovative activities, which will bring commercial profit, promote firms'innovative performance.(3) Absorptive capacity will moderate the relationship between network position and firm's innovative performance. The moderating effect of absorptive capacity is found in both network positions. If firms occupying prominent position or entrepreneurial position have high absorptive capacity, they will gain much more from their network position and will be more competitive in using network position to enhance their innovative performance.