Information Technology Reference
In-Depth Information
2.3.3 Betweenness Centrality and Innovation Performance
Betweenness is an indicator of network centrality based on Freeman's (1979)
measure of betweenness, which captures the extent to which firms sit astride
network pathways between other organizations. Betweenness centrality indicates a
firm's ability to control information flows within communication network. Hence, a
firm controls more information flow, it could gather more important information.
Thus, the firm could perform better than others in innovation process. Similarly,
Smith-Owen and Powell (2004) proved the effect of betweenness centrality on
innovation performance in Boston biotechnology community. Accordingly, we
hypothesize that:
H6c: There is a positive relationship between a firm's betweenness centrality
and its innovation performance.
2.3.4 Coreness and Innovation Performance
The core/periphery models developed by Borgatti and Everett (1999) provide a
useful analytical tool that represents the classic idea of a core formed by a group of
densely connected actors, in contrast to a more loosely connected class of actors
making up the periphery of the system. In other words, a network has a
core/periphery structure if the network can be partitioned into two sets: a core
whose members are densely tied to each other and a periphery whose members have
more ties to core members than to each other. From this viewpoint, firms in core
have more dense communication than firms in periphery and thus transfer more
information and knowledge among them. Accordingly, firms in core have better
innovation performance than firms in periphery. In this research, we use coreness as
an indicator of core/periphery which was developed by Borgatti and Everett (1999).
The higher the coreness of a firm, the better the firm's innovation performance will
be. Thus, it can be stated that:
H6d: There is a positive relationship between a firm's coreness and its
innovation performance.
2.3.5 Structural Holes and Innovation Performance
Recent research suggests that a firm's ego network is likely to be important to
innovation such as the extent of connectivity between a firm's partners (Burt, 1992).
The underlying mechanism posited by Burt is that actors in a network rich in
structural holes will be able to access novel information from remote parts of the
network, and exploit that information to their advantage (Burt, 1992). Moreover, a
structural hole indicates that the actor on either side of the hole have access to
different flows of information (Hargadon & Sutton, 1997). Many structural holes in
ego's network will increase ego's access to diverse information and, thus, enhance
innovation performance (Ahuja, 2000). According, we hypothesize that:
H6e: The greater the structural holes bridged by a firm, the greater the firm's
innovation performance.
