The role of ego network structure in facilitating ego network innovations

A great deal of research on innovation implicitly relies upon the network in which a firm is embedded to explain its innovative capabilities. Interestingly, however, most research examines innovation at the firm level, rather than at the network level. Thus, there is a significant gap in the literature regarding the effects of network structure on innovation within a firm's network. In this research, we contribute to the literature of supply chain innovations by developing and testing theoretically derived hypotheses regarding the effect of network structure on innovation output and distribution, as measured by the aggregate count and variance in the distribution of patents of the ego network in which a firm exists. Utilizing a manufacturing joint venture network dataset, we identify effects of various ego network constructs such as betweenness, density, brokerage, and weakness on ego network innovation. We find support for the idea that innovation in a supply chain is highly dependent upon the network structure of the interfirm relationships. Thus, it is not just what you know or how well you individually innovate, but also how well the firm can leverage its supply network connections that engender superior innovation outcomes.