Small World Patterns and Firm Innovativeness

In this section we switch analytical perspective and take a closer look at the systemic or overall network level. As outlined before (cf. Sect. 8.3 ), an in-depth understanding of large-scale network patterns is important for several reasons. On the one hand, previous studies have demonstrated that networks with comparably short path lengths and a high level of clustering – so-called “small-world” networks – can facilitate the exchange of information, ideas and knowledge in networks (Fleming, L., C. King, A. I. Juda. 2007. Small worlds and regional innovation. Organ. Sci. 18(6) 938-954). This, however, substantiates the assumption that systemic level network properties are likely to affect the embedded firms in their efforts to innovate. On the other hand, systemic level studies have some far-ranging implications, not only for firms but also for policy makers, by providing an informative basis for the evaluation of cooperation-related innovation policies at the national and supra-national level. In a nutshell, the aim of the third empirical part of this study is to shed light on the relationship between specific types of large-scale network properties at the macro-level and firm-level innovation outcomes at the micro-level. This investigation is organized as follows. After a short introduction in Sect. 11.1 we outline selected theoretical concepts. Next, we continue by providing the graph theoretical underpinnings of small-world properties in Sect. 11.2. Then, we introduce our conceptual framework and derive a set of testable hypotheses. In Sect. 11.3 we provide a short overview of data and methods used for this analysis. After these preparatory steps, we continue with a description of the empirical model and present our estimation results in Sect. 11.4. Finally, after a brief discussion of our main findings we conclude with some critical remarks.