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The problem of embeddedness revisited: Collaboration and market types

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  • Andersen, Kristina Vaarst

Abstract

Embeddedness has been touted as a framework for knowledge exchange and innovation, and thus as an important precondition for high-level performance. Embeddedness of economic action in social relations improves access to resources, but over-embeddedness impedes performance. However, until now the association between embeddedness and performance in different markets has been neglected. This paper challenges the predominant view of embeddedness and over-embeddedness as absolute and mutually exclusive conditions. Through regression analyses of novel data from a project-based industry, the paper tests the association between embeddedness and economic performance in different markets, finding a positive association in the domestic market, but a negative association in foreign markets. This divergence in performance is caused in part by selection bias in the access to foreign markets, and in part by accumulation of localized knowledge.

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  • Andersen, Kristina Vaarst, 2013. "The problem of embeddedness revisited: Collaboration and market types," Research Policy, Elsevier, vol. 42(1), pages 139-148.
    • Handle: RePEc:eee:respol:v:42:y:2013:i:1:p:139-148
    DOI: 10.1016/j.respol.2012.05.005
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    More about this item

    Keywords

    Embeddedness; Knowledge transfer; Opportunity allocation;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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