A Longitudinal Study of the Influence of Alliance Network Structure and Composition on Firm Exploratory Innovation

Abstract

This study examines the influence of the structure and composition of a firm's alliance network on its exploratory innovation —innovation embodying knowledge that is novel relative to the firm's extant knowledge. A longitudinal investigation of 77 telecommunications equipment manufacturers indicated that the technological diversity of a firm's alliance partners increases its exploratory innovation. Further, network density among a firm's alliance partners strengthens the influence of diversity. These results suggest the benefits of network “closure” (wherein a firm's partners are also partners) and access to diverse information can coexist in an alliance network and that these combined benefits increase exploratory innovation.