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Optimal Cognitive Distance and Absorptive Capacity

Author

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  • Nooteboom, B.

    (Tilburg University, Center For Economic Research)

  • Vanhaverbeke, W.P.M.
  • Duijsters, G.M.

    (Tilburg University, Center For Economic Research)

  • Gilsing, V.A.

    (Tilburg University, Center For Economic Research)

  • Oord, A.

Abstract

In this paper we test the relation between cognitive distance and innovation performance of firms engaged in technology-based alliances.The key finding is that the hypothesis of an inverted U-shaped effect of cognitive distance on innovation performance of firms is confirmed.Moreover, as expected, we found that the positive effect for firms is much higher when engaging in more radical, exploratory alliances than in more exploitative alliances.The effect of cumulative RD turns out to be mixed.It may increase absorptive capacity, as expected, but there is clear evidence that it also reduces the effect of cognitive distance on novelty value.
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Suggested Citation

  • Nooteboom, B. & Vanhaverbeke, W.P.M. & Duijsters, G.M. & Gilsing, V.A. & Oord, A., 2006. "Optimal Cognitive Distance and Absorptive Capacity," Discussion Paper 2006-33, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:eb5155cb-c888-4301-a667-90a1b8df1c1a
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    More about this item

    Keywords

    innovation; inter-firm alliances; cognitive distance; absorptive capacity; exploration and exploitation;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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