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Fits and Misfits: Technological Matching and R&D Networks

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Listed:
  • Cowan, Robin

    (UNU-MERIT, and BETA, Universite Louis Pasteur)

  • Jonard, Nicolas

    (Universite du Luxembourg.)

  • Sanditov, Bulat

    (UNU-MERIT, and Maastricht University)

Abstract

This paper presents an economic model of R&D network formation through the creation of strategic alliances. Firms are randomly endowed with knowledge elements. They base their alliance decisions purely on the technological fit of potential partners, ignoring social capital considerations and indirect benefits on the network. This is sufficient to generate equilibrium networks with the small world properties of observed alliance networks, namely short pairwise distances and local clustering. The equilibrium networks are more clustered than "comparable" random graphs, while they have similar characteristic path length. Two extreme regimes of competition are examined, to show that while the competition has a quantitative effect on the equilibrium networks (density is lower with competition), the small world features of the equilibrium networks are preserved.

Suggested Citation

  • Cowan, Robin & Jonard, Nicolas & Sanditov, Bulat, 2009. "Fits and Misfits: Technological Matching and R&D Networks," MERIT Working Papers 2009-042, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2009042
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    References listed on IDEAS

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    More about this item

    Keywords

    network formation; small worlds; R&D networks; strategic alliances; business clusters;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • 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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