Collaboration networks, structural holes, and innovation: A longitudinal study

To assess the effects of a firm's network of relations on innovation, this paper elaborates a theoretical framework that relates three aspects of a fi rm's ego network-direct ties, indirect ties, and structural holes (disconne ctions between a firm's partners)-to the firm's subsequent innovation outpu t. It posits that direct and indirect ties both have a positive impact on i nnovation but that the impact of indirect ties is moderated by the number o f a firm's direct ties. Structural holes are proposed to have both positive and negative influences on subsequent innovation. Results from a longitudi nal study of firms in the international chemicals industry indicate support for the predictions on direct and indirect ties, but in the interfirm coll aboration network, increasing structural holes has a negative effect on inn ovation. Among the implications for interorganizational network theory is t hat the optimal structure of interfirm networks depends on the objectives o f the network members.