UNU-MERIT Working Papers Series
If the Alliance Fits . . . : Innovation and Network Dynamics
Robin Cowan & Nicolas Jonard #2008-022Network formation is often said to be driven by social capital
considerations. A typical pattern observed in the empirical data on
strategic alliances is that of small world networks: dense subgroups of
firms interconnected by (few) clique-spanning ties. The typical argument
is that there is social capital value both to being embedded in a dense
cluster, and to bridging disconnected clusters. In this paper we develop
and analyze a simple model of joint innovation where we are able to
reproduce these features, based solely on the assumption that successful
partnering demands some intermediate amount of similarity between the
partners.
JEL Codes: D83, D85, L14, D74
Key words: Network formation; Strategic alliances; Knowledge portfolios
UNU-MERIT Working Papers
ISSN 1871-9872
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