Influence of Firms’ Network Position on their Innovation Outcome in a Mature Industrial Cluster

Our study employs a social network perspective to investigate the influence of firms’ structural and relational embeddedness on their innovation outcome in a directed network in a mature industrial...

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title: Open Innovation: The New Imperative For Creating and Profiting From Technology
abstract: Companies that don’t innovate die, but meta-innovation (innovating how to innovate) is becoming increasingly the center of the attention. In his book, Chesbrough describes two different paradigms for technological innovation: one internal (described as ‘classic’ or ‘closed’) and one external. Chesbrough’s thesis is that the internal paradigm is now being rendered obsolete by the external one. The internal paradigm is based on research and development done in-house: companies fund their research labs, which produce intellectual property, which is developed and capitalized by the company and can inject further funding in the research process. Chesbrough indicates two major factors eroding this paradigm: the growing mobility of skilled people; and the growing presence of Venture Capital. The combination of these two factors increases the permeability of the firm, and allows ideas and intellectual property to escape the company’s boundaries. Chesbrough outlines how these erosions factors impacted Xerox in its PARC research center. He shows how the company failed to capitalize on several of the groundbreaking innovations that originated in those labs and were made profitable elsewhere. The external innovation paradigm (that Chesbrough names ‘open’ in contrast with the ‘closed’ one) is designed to accept and profit from those eroding factors and is based on the idea that companies should develop a knowledge-creation and intellectual property management strategy which assumes that R&D involves an effective synthesis of internal research and development and intellectual property derived from the environment. Chesbrough suggests that if firms are working in a fertile innovation environment, innovation will flourish, and that it is much cheaper and safer for firms to simply shop for the ideas that they consider most promising, which supplement their internal development efforts. The purchasing company must continue the development in-house, refine and eventually integrate the new product with existing products or services. He shows how Intel and Cisco managed innovation at the pace required by the market by investing as venture capitalists in the open market and further refining the technologies that those start-ups were able to incubate, or simply by licensing intellectual property that originated elsewhere. The increased effectiveness of the external innovation paradigm is not only due to the cited erosion factors, but Chesbrough describes how research and development follow different rules and while the first resembles the game of poker (high risk, fast pace, low strategy), the second resembles the game of chess (lower risk, slower pace, higher strategy). He argues that while firms normally focus on the second part, it is very hard for them to play such a different and risky game. The ability to know when to stop the funding and fold or continue the capital injection is something that Venture Capital firms have learned to master, while regular firms struggle with it. Chesbrough suggests that firms should focus on their strategic game of intellectual property acquisition to reduce their capital risks and research costs while venture capital firms (or external smaller firms) play the risky game of research.

title: Social networks for innovation and new product development
abstract: In this article we first provide a brief introduction into social network analysis, focusing on the measures and approaches that are used in the empirical contributions in this special issue. Second, we discuss the role of social networks in new product development. Social networks are inherently multilevel; we consider four “levels”: networks inside a firm, networks that cross firm boundaries, networks between firms, and networks that reside outside of the firm. Third, we discuss these four levels and highlight some of the extant research. We summarize and position the eight papers in this special issue along these four levels. Together, we argue, these papers provide an interesting coverage of this burgeoning field.

title: The paradox of openness: Appropriability, external search and collaboration
abstract: To innovate, firms often need to draw from, and collaborate with, a large number of actors from outside their organization. At the same time, firms need also to be focused on capturing the returns from their innovative ideas. This gives rise to a paradox of openness—the creation of innovations often requires openness, but the commercialization of innovations requires protection. Based on econometric analysis of data from a UK innovation survey, we find a concave relationship between firms’ breadth of external search and formal collaboration for innovation, and the strength of the firms’ appropriability strategies. We show that this concave relationship is stronger for breadth of formal collaboration than for external search. There is also partial evidence suggesting that the relationship is less pronounced for both external search and formal collaboration if firms do not draw ideas from or collaborate with competitors. We explore the implications of these findings for the literature on open innovation and innovation strategy.

title: Geography, Networks, and Knowledge Flow
abstract: Knowledge---which is closely linked to firm innovativeness---is accessed across organizational boundaries and geographic space via networks operating at different levels of analysis. However, we know tantalizingly little about the comparative influence of geography on knowledge flow across organizational boundaries over different types of ties, despite warnings that research needs to account for the geographic context of ties to fully understand causal relationships. Using a combination of primary and secondary data on 77 Canadian mutual fund companies, we find that institutional-level ties are valuable in knowledge transmission only when such ties are geographically proximate. Organization-level ties fail to act as transmitters of knowledge, regardless of geographic location. Interestingly, we find that geographically distant individual-level friendship ties are superior conduits for knowledge flow, which suggests they span “geographic holes.”

title: How Exactly Do Network Relationships Pay Off? The Effects of Network Size and Relationship Quality on Access to Start–Up Resources
abstract: Entrepreneurs are expected to profit from network relationships. Research addressing the link between entrepreneurs’ network characteristics and their performance, however, has so far produced inconclusive results. In an attempt to explain these inconsistencies, we investigate the resource returns connected to network size and relationship quality. Based on a sample of 379 nascent entrepreneurs, we find that increasing network size and relationship quality results in diminishing marginal returns in terms of access to financial capital, knowledge and information, and additional business contacts. Additionally, we observe that the returns vary strongly by resource type.

title: Signals across multiple networks: : how venture capital and alliance networks affect interorganizational collaboration.
abstract: In this article, we examine the contingent effects of signals generated by different types of networks on new ventures' formation of future strategic alliances. We argue that the signaling value of a given tie in reducing adverse selection is more pronounced when another type of tie is lacking. In particular, we suggest that signals associated with (i) a new venture's affiliations with venture capitalists (VCs) that have prominent positions in syndicate networks and (ii) a new venture's prominent position in alliance networks resulting from previous alliances offer redundant benefits. As a result, the positive effect of VC prominence in determining a new venture's future alliance formation diminishes as the new venture's prominence in alliance networks increases. Evidence from biotech alliances between new ventures and established companies provides support for our theory.

title: Network embeddedness and new product development in the biopharmaceutical industry: The moderating role of open innovation flow
abstract: This paper explores the role of centrality and structural holes positions on the likelihood to develop new products and the moderating role of the open innovation flow, a measure of the net knowledge flow crossing the firm’s boundaries, on the aforementioned relation. We argue that network positions provide the information content to the firm, whilst open innovation flow describes how the firm uses such content, thus the combination of these two concepts has a significant impact on new product development. We test the theoretical framework on a large sample of 544 public companies and data from 1758 agreements among 1890 bio-pharmaceutical firms through the period 2006–2010. Our results show that being centrally located in the network positively affects the new product development process, while having a structural holes position has no effect on the aforementioned performance. However, the interaction of the two network positions with the open innovation flow has a positive impact on the likelihood to develop new products.

title: The Two Faces of Control: Network Closure and Individual Performance among Knowledge Workers
abstract: This paper argues that the effect of dense social ties, or network closure, on a knowledge worker's performance depends on the predominant role this worker plays with his or her exchange partners in the relationships affected by that closure. Using data on informal exchanges among investment bankers in the equities division of a large financial services firm operating in Europe, Asia-Pacific, Africa, and the Americas in 2001, we find that network closure in relationships in which the banker acts as an acquirer of information increases his or her performance, whereas closure in relationships in which the banker acts as a provider of information decreases it. We also find that these effects are moderated by the bankers' ability to employ alternative means (such as formal authority) to induce the cooperation of exchange partners in their acquirer role, as well as by the extent to which the bankers can benefit from being free from the control of exchange partners in their provider role. Our findings highlight the two sides of the normative control associated with network closure: control benefits people when they need to induce exchange partners to behave according to their preferences, but it hurts them when it forces them to behave according to the preferences of those partners.

title: Regions Matter: How Localized Social Capital Affects Innovation and External Knowledge Acquisition
abstract: To introduce new products, firms often use knowledge from other organizations. Drawing on social capital theory and the relational view of the firm, we argue that geographically localized social capital affects a firm's ability to innovate through various external channels. Combining data on social capital at the regional level, with a large-scale data set of the innovative activities of a representative sample of 2,413 Italian manufacturing firms from 21 regions, and controlling for a large set of firm and regional characteristics, we find that being located in a region characterized by a high level of social capital leads to a higher propensity to innovate. We find also that being located in an area characterized by a high degree of localized social capital is complementary to firms' investments in internal research and development (R&D) and that such a location positively moderates the effectiveness of externally acquired R&D on the propensity to innovate.

title: Bilateral Collaboration and the Emergence of Innovation Networks
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title: Internet entrepreneurship: Social capital, human capital, and performance of Internet ventures in China
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title: The duality of collaboration : Inducements and opportunities in the formation of interfirm linkages
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title: Structural Holes and Good Ideas1
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title: Network Closure or Structural Hole? The Conditioning Effects of Network–Level Social Capital on Innovation Performance
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title: Structural vs. relational embeddedness: social capital and managerial performance
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title: Domestic alliance networks and regional strategies of MNEs: A structural embeddedness perspective
abstract: We draw on a social network perspective to explain multinational enterprises’ (MNEs) propensity to distribute their operations unevenly across various regions of the world. We focus on how the positioning of MNEs in their domestic network of strategic alliances affects their geographic scope, i.e., whether they concentrate on their home region or expand beyond it. We theorize that embeddedness in alliance networks constitutes a double-edged sword to the geographic scope of MNEs. Strong embeddedness in domestic alliance networks drives the development of location-bound firm-specific advantages (FSAs), which may narrow down MNEs’ geographic scope. In contrast, moderate embeddedness leads to more non-location-bound FSAs, which reduce liability of foreignness, and hence motivate MNEs to widen their geographical scope. We thus predict a non-linear relationship between domestic alliance network embeddedness and MNE geographic scope. Furthermore, the impact of the domestic alliance network on MNE geographic scope hinges on the organizational ability to efficiently and effectively absorb resources stemming from the network. We test our hypotheses using FDI data from 302 US MNEs in the information and communication technology industry for the period of 2001–2008, and generally find robust support for the hypothesized relationships.RésuméNous nous appuyons sur une perspective du réseau social pour expliquer la propension des entreprises multinationales (EMN) à répartir inégalement leurs opérations dans les diverses régions du monde. Nous nous concentrons sur la façon dont le positionnement des entreprises multinationales, dans leur réseau domestique d’alliances stratégiques, impacte leur champ géographique ; c’est-à-dire, si elles se concentrent sur leur région d’origine ou si elles s’étendent au-delà. Nous faisons l’hypothèse que l’intégration dans les réseaux d’alliances constitue une épée à double tranchant concernant le champ géographique des entreprises multinationales. La forte intégration dans des réseaux d’alliances nationales conduit au développement d’avantages spécifiques de l’entreprise (ASE) liés à la localisation, ce qui peut limiter le champ géographique des entreprises multinationales. En revanche, une intégration modérée conduit à plus d’ASE non liés à la localisation, ce qui réduit les inconvénients de l’extranéité et motive ainsi les EMN à élargir leur champ géographique. Nous prévoyons donc une relation non-linéaire entre l’intégration au sein d’un réseau d’alliances nationales et le champ géographique des EMN. En outre, l’impact du réseau d’alliances domestiques sur le champ géographique des EMN repose sur la capacité organisationnelle à efficacement et utilement absorber les ressources découlant du réseau. Nous testons nos hypothèses à l’aide de données sur les investissements directs étrangers de 302 EMN américaines dans l’industrie des technologies de l’information et de la communication pour la période 2001‒2008 et nous constatons généralement une solide confirmation des relations hypothétiques envisagées.ResumenNos basamos en una perspectiva de redes sociales para explicar la propensión de las empresas multinacionales (EMN) a distribuir sus operaciones de manera desigual en varias regiones del mundo. Nos enfocamos en cómo el posicionamiento de las EMN en su red local de alianzas estratégicas afecta su alcance geográfico; es decir, si se concentran en su región de origen o se expanden más allá de esta. Teorizamos que la integración en redes de alianzas constituye una espada de doble filo para el alcance geográfico de las EMN. Una fuerte integración en redes de alianzas domésticas impulsa el desarrollo de las ventajas específicas de la empresa vinculadas a un lugar determinado, lo que puede estrechar el alcance geográfico de la EMN. En contraste, una integración moderada lleva a ventajas específicas de la empresa no vinculadas a un lugar determinado, lo cual reduce las desventajas de extranjería, y por ende motiva a las EMN a ampliar su alcance geográfico. Por ende, predecimos una relación no linear entre la integración en una red de alianza doméstica y el alcance geográfico de una EMN. Además, el impacto de la red de alianza doméstica en el alcance geográfico de la MNE se articula con la habilidad organizacional para absorber eficiente y efectivamente los recursos procedentes de la red. Nosotros pusimos a prueba nuestras hipótesis usando datos de IED de 302 EMN estadounidenses en la industria de las tecnologías de información y comunicación en el periodo 2001 al 2008, y en general encontramos un apoyo sólido paras las relaciones de las hipótesis.ResumoNós partimos de uma perspectiva de rede social para explicar a propensão de empresas multinacionais (MNEs) para distribuir suas operações de forma desigual em várias regiões do mundo. Nós nos concentramos em como o posicionamento das multinacionais em sua rede doméstica de alianças estratégicas afeta seu escopo geográfico; ou seja, se eles se concentram em sua região de origem ou se expandem para além da mesma. Nós teorizamos que a inserção nas redes de alianças constitui uma espada de dois gumes para o escopo geográfico das MNEs. A forte inserção nas redes de alianças domésticas impulsiona o desenvolvimento de vantagens específicas da empresa vinculadas à localização (FSAs), que podem restringir o escopo geográfico das MNEs. Em contrapartida, a inserção moderada leva a mais FSAs não vinculadas à localização, que reduzem a desvantagem de ser estrangeiro e, portanto, motivam as MNEs a ampliar seu escopo geográfico. Prevemos, assim, uma relação não-linear entre a inserção na rede de aliança doméstica e o escopo geográfico do MNE. Além disso, o impacto da rede de aliança doméstica no escopo geográfico da MNE depende da capacidade organizacional de absorver eficiente e efetivamente recursos provenientes da rede. Testamos nossas hipóteses usando dados de FDI de 302 MNEs dos Estados Unidos da indústria de tecnologia da informação e comunicação no período de 2001-2008 e geralmente encontramos suporte robusto para as relações hipotetizadas.概要我们借鉴社会网络视角解释跨国企业(MNEs)在世界不同地区不均匀分布其运营的倾向。我们关注MNEs在它们战略联盟的国内网络的定位如何影响它们的地域范围; 即,它们是集中在其本土区域还是在它之外扩张。我们推论,嵌入联盟网络对MNEs的地域范围构成双刃剑。对国内联盟网络的强嵌入驱动位置约束的公司特有优势(FSAs)的开发,这可能缩小跨国企业的地域范围。相比之下,适度的嵌入导致更多的非位置约束的FSAs,这减少异国劣势,并因此激励跨国企业扩大其地域范围。我们因此预测国内联盟网络嵌入与MNE地域范围之间的非线性关系。此外,国内联盟网络对跨国企业地域范围的影响,取决于卓有成效地吸收网络资源的组织能力。我们使用2001‒2008年信息和通信技术行业302个美国跨国企业的FDI数据来测试我们的假设,并普遍找到对假设关系的强劲支持。

title: Knowledge Networks and Innovative Performance in an Industrial District: The Case of a Footwear District in the South of Italy
abstract: The traditional district literature tends to assume that: (1) the competitiveness of firms depends on external sources of knowledge; (2) all firms in a district benefit from knowledge externalities; (3) relying on external knowledge relationships necessarily means these are confined to the district area. Our case study of the Barletta footwear district in the South of Italy suggests otherwise. Based on social network analysis, we demonstrate that the local knowledge network is quite weak and unevenly distributed among the local firms. A strong local network position of a firm tended to increase their innovative performance, and so did their connectivity to extra‐local firms. So, it mattered being connected either locally or non‐locally: being co‐located was surely not enough. Having a high absorptive capacity seemed to raise only indirectly, through non‐local relationships, the innovative performance of firms.

title: The Selective Nature of Knowledge Networks in Clusters: Evidence from the Wine Industry
abstract: Most of the studies about industrial clusters and innovation stress the importance of firms' geographical proximity and their embeddedness in local business networks (BNs) as factors that positively affect their learning and innovation processes. More recently, scholars have started to claim that firm-specific characteristics should be considered to be central in the process of learning and innovation in clusters. This article contributes to this latter direction of research. It applies social network analysis to explore the structural properties of knowledge networks in three wine clusters in Italy and Chile. The results show that in spite of firms' geographical proximity and the pervasiveness of local BNs, innovation-related knowledge is diffused in clusters in a highly selective and uneven way. This pattern is found to be related to the heterogeneous and asymmetric distribution of firm knowledge bases in the clusters.

title: Knowledge Networks, Collaboration Networks, and Exploratory Innovation
abstract: Innovation in firms is doubly embedded: in a social network of collaborations between researchers, and in a knowledge network composed of linkages between knowledge elements. The two networks are decoupled. Their structural features are distinct and influence researchers' exploratory innovation differently. Using the patent data of a leading U.S. microprocessor manufacturer, we constructed the firm's collaboration and knowledge networks, and examined the effects of two structural features in the two networks--structural holes and degree centrality--on researchers' exploratory innovation. Our findings show that a researcher with knowledge elements rich in structural holes in the knowledge network tends to explore fewer new knowledge elements from outside the firm, while structural holes in the collaboration network increase exploratory innovation. The average degree centrality of a researcher's knowledge elements in the knowledge network has an inverted-U-shaped relationship with his or her exploratory innovation, while degree centrality in the collaboration network has a negative effect. This study suggests that knowledge and social networks influence where researchers search for discoveries

title: From birth through transition to maturation : the evolution of technology-based alliance networks
abstract: This article considers the evolution of interfirm networks within a context of technological change. More specifically, it studies the evolution of structural and positional embeddedness in a network of technology-based alliances when it moves from an early period of invention creation to a subsequent period of new product development and commercialization. Empirically, we study the evolution of technology-based alliance networks in the biopharmaceutical industry over a period of about 25 years, from 1975 until 1999. Examining interorganizational networks over such an extended time period allows us to move beyond more static approaches that have characterized most network studies until now, and consider network evolution along its various phases of birth, growth, and early maturation instead. Our findings indicate that the evolution of both structural and positional embeddedness does not follow the common idea of a path of linear progression, but instead strongly exhibits nonlinearity by resembling a sigmoid pattern. These findings have a number of implications. First, the break in the process of linear progression contrasts with the standing literature that (implicitly) assumes the informational and resource value of a network structure to remain constant over time or to evolve linearly from carrying low value to progressively higher value. Instead, our finding that the evolution of structural and positional embeddedness is nonlinear echoes the speculative idea, as expressed by Gulati and Garguilo, that network change may possibly be nonlinear when seen over the long run. A second implication concerns the validity of standing insights from the social network literature such as Coleman's theory of social capital and Burt's theory of structural holes. These theories may not apply to the extent that there are strong changes in environmental conditions like environmental uncertainty and/or munificence, such as during a transition phase as considered in this study.

title: Clusters, networks, and firm innovativeness
abstract: This paper extends current knowledge of industry clusters by disentangling the effects of networks from cluster (i.e., distinctly geographic) mechanisms on firm performance as well as by studying the influence of these different mechanisms on firms located inside and outside the industry cluster. It also highlights the importance of simultaneously modeling multiple networks which may differentially influence important firm outcomes. In the paper, I model the innovativeness of Canadian mutual fund companies as a function of their geographic location—inside or outside the industry cluster of Toronto—and of their centrality in networks of managerial and institutional ties. I find that locating in the industry cluster as well as centrality in the managerial tie network enhances firm innovation, while centrality in the institutional tie network does not.

title: A social network analysis of leading semiconductor companies’ knowledge flow network
abstract: This study (1) constructs a knowledge flow network for leading semiconductor companies; (2) seeks out how leading semiconductor companies can attain knowledge competencies (through patent activities or network position) via social network analysis; and (3) proposes critical strategic suggestions regarding knowledge flow networks in the industry. The results show (1) that a knowledge flow network with no isolators and Asian semiconductor firms are closely connected with other firms all over the world; (2) that patent activities are positively associated with central network positions and firm performance; (3) that closeness centrality is helpful for patent citation activities and also helps to achieve better performance; and (4) that semiconductor companies in Asia are also closely connected with others in the world.

title: The interaction between inter-firm and interlocking directorate networks on firm's new product development outcomes
abstract: This paper explores the interaction between a prominent board of directors and the network of inter-firm relationships on new product development. Specifically, we posit a positive interaction effect between a prominent board and the inter-firm network and structural holes positions on the number of new products developed by the firm. We test the theoretical framework on a sample of 1758 agreements among 1890 biopharmaceutical firms over the period 2006–2010. We find that by filtering, complementing and legitimizing information coming from the inter-firm network, a prominent interlocking directorate network can improve the inter-firm network's effects on new product development. We discuss important implications for how inter-personal networks (such as the board interlock directorate network) help to develop the effectiveness of inter-firm relationship networks in achieving new product development outcomes.

title: The Search-Transfer Problem: The Role of Weak Ties in Sharing Knowledge across Organization Subunits
abstract: This paper combines the concept of weak ties from social network research and the notion of complex knowledge to explain the role of weak ties in sharing knowledge across organization subunits in a multiunit organization. I use a network study of 120 new-product development projects undertaken by 41 divisions in a large electronics company to examine the task of developing new products in the least amount of time. Findings show that weak interunit ties help a project team search for useful knowledge in other subunits but impede the transfer of complex knowledge, which tends to require a strong tie between the two parties to a transfer. Having weak interunit ties speeds up projects when knowledge is not complex but slows them down when the knowledge to be transferred is highly complex. I discuss the implications of these findings for research on social networks and product innovation.

title: The Reification of Absorptive Capacity: A Critical Review and Rejuvenation of the Construct
abstract: We conduct a detailed analysis of 289 absorptive capacity papers from 14 journals to assess how the construct has been utilized, examine the key papers in the field, and identify the substantive contributions to the broader literature using a thematic analysis. We argue that research in this area is fundamentally driven by five critical assumptions that we conclude have led to its reification and that this reification has led to stifling of research in this area. To address this, we propose a model of absorptive capacity processes, antecedents, and outcomes.

title: The micro-determinants of meso-level learning and innovation: evidence from a Chilean wine cluster
abstract: Most analyses of the relationship between spatial clustering and the technological learning of firms have emphasised the influence of the former on the latter, and have focused on intra-cluster learning as the driver of innovative performance. This paper reverses those perspectives. It examines the influence of individual firms’ absorptive capacities on both the functioning of the intra-cluster knowledge system and its interconnection with extra-cluster knowledge. It applies social network analysis to identify different cognitive roles played by cluster firms and the overall structure of the knowledge system of a wine cluster in Chile. The results show that knowledge is not diffused evenly ‘in the air’, but flows within a core group of firms characterised by advanced absorptive capacities. Firms’ different cognitive roles include some—as in the case of technological gatekeepers—that contribute actively to the acquisition, creation and diffusion of knowledge. Others remain cognitively isolated from the cluster, though in some cases strongly linked to extra-cluster knowledge. Possible implications for policy are noted.

title: Measuring Firm-Level Innovation Using Short Questionnaires: Evidence from an Experiment
abstract: Little is known about innovation in developing countries, partly because of the lack of comparable and reliable data. Collecting data on firm-level innovation is challenging because of the subjective definition of what determines an innovation, a problem that is exacerbated in developing countries where innovation is likely to be more incremental and less radical. This paper contributes to the literature by presenting the results of an experiment aiming to identify the survey instrument that better captures firm-level innovation in developing countries. The paper shows that a small set of questions included in a multi-topic, firm-level survey does not provide an accurate picture of firm-level innovation and tends to overestimate innovation rates. Issues related to framing explain some of the unreliability of innovation responses, while cognitive problems do not appear to play a significant role.

title: Informational networks and innovation in mature industrial clusters
abstract: The position of a firm in inter-organizational networks that occur in geographic clusters can affect innovation. This study analyzes a wide range of ties and how they impact on the transmission of tacit and explicit knowledge. Thus, a firm's position influences its innovative performance in different ways, according to the type of network—tacit or explicit—and the type of innovation—process or product—under analysis. Few empirical studies have analyzed the relation between social networks and innovation in mature geographic clusters; an appropriate context bearing in mind the contingent nature of the relations under study. The results support the idea that a central position in both tacit and explicit knowledge networks is especially significant in the case of product innovation, but that the influence of structural holes is weaker. These findings contribute to the literature on clusters and social networks by explaining how strategic management of positions in knowledge networks can improve the innovative performance of a firm.

title: Power and Centrality: A Family of Measures
abstract: Although network centrality is generally assumed to produce power, recent research shows that this is not the case in exchange networks. This paper proposes a generalization of the concept of centrality that accounts for both the usual positive relationship between power and centrality and Cook et al.'s recent exceptional results.

title: Formation and dissolution of inter-firm linkages in lengthy and stable networks in clusters
abstract: Firms aspire to take advantage of technical and business networks through inter-organizational interactions to improve performance. Consequently, researchers are increasingly focusing on the dynamics and implications of network formation at both local and global levels. The recent research trend does not consider a monotonic effect and simplistic approach to proximity because proximity is a complex multidimensional concept. Using data from a foodstuffs cluster in the Valencian region (Spain) and advanced econometric methods such as Exponential Random Graph Models, this study aims to clarify the detrimental effects and complementarities that may arise among proximity dimensions. After controlling for network endogenous forces and firm characteristics, findings reveal the negative effect of cognitive and institutional proximity dimensions on the creation of linkages in advanced stages of the cluster life cycle. Furthermore, social proximity and geographical proximity favor the formation of inter-firm relationships and reinforce the organizational dimension.

title: Network dynamics in regional clusters: Evidence from Chile
abstract: A wealth of empirical literature shows that one of elements of success for regional clusters is that they facilitate the formation of local inter-organizational networks, which act as conduits of knowledge and innovation. While several studies analyse the benefits and characteristics of regional cluster networks, very little is known about how such networks evolve over time and the extent to which their dynamics can affect development processes. Using longitudinal data on a wine cluster in Chile and Stochastic Actor-Oriented Models (SAOM) to measure network dynamics, this paper examines the microdynamics underpinning the formation of new knowledge ties among wineries. It finds that the coexistence of cohesion effects (reciprocity and transitivity) with the weak knowledge bases of some firms in the cluster contribute to a stable informal hierarchical network structure over time. The empirical results have implications for theories on network dynamics in regional clusters and cluster policies.

title: Asymptotic Confidence Intervals for Indirect Effects in Structural Equation Models
abstract: For comments on an earlier draft of this chapter and for detailed advice I am indebted to Robert M. Hauser, Halliman H. Winsborough, and Toni Richards, several anonymous reviewers, and the editor of this volume. I also wish to thank John Raisian, Nancy Rytina, and Barbara Mann for their comments and Mark Wilson for able research assistance. The opinions expressed here are the sole responsibility of the author.

title: SPSS and SAS procedures for estimating indirect effects in simple mediation models
abstract: Researchers often conduct mediation analysis in order to indirectly assess the effect of a proposed cause on some outcome through a proposed mediator. The utility of mediation analysis stems from its ability to go beyond the merely descriptive to a more functional understanding of the relationships among variables. A necessary component of mediation is a statistically and practically significant indirect effect. Although mediation hypotheses are frequently explored in psychological research, formal significance tests of indirect effects are rarely conducted. After a brief overview of mediation, we argue the importance of directly testing the significance of indirect effects and provide SPSS and SAS macros that facilitate estimation of the indirect effect with a normal theory approach and a bootstrap approach to obtaining confidence intervals, as well as the traditional approach advocated by Baron and Kenny (1986). We hope that this discussion and the macros will enhance the frequency of formal mediation tests in the psychology literature. Electronic copies of these macros may be downloaded from the Psychonomic Society’s Web archive