Clusters, networks, and firm innovativeness

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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.

Original languageEnglish (US)
Pages (from-to)287-295
Number of pages9
JournalStrategic Management Journal
Volume26
Issue number3
DOIs
StatePublished - Mar 1 2005

Keywords

  • Industry clusters
  • Innovation
  • Multiple networks
  • Mutual funds
  • Networks

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