Public Knowledge, Private Gain: The Effect of Spillover Networks on Firms' Innovative Performance

Complementing received research on the role of collaboration networks in fostering interorganizational learning and innovation, the authors focus on the importance of learning from other firms’ public knowledge. To this end they introduce the concept of spillover network—the network of “source” firms whose public knowledge a “recipient” firm is able to readily absorb and use as innovation input. Using patent-based data on a panel of semiconductor firms between 1976 and 2002, the authors demonstrate that firms’ innovative performance tends to be higher when their spillover network is either munificent or rich in structural holes. However, being exposed to a spillover network that is both munificent and rich in structural holes is generally counterproductive. Consistent with the insight that the value of external knowledge inputs depends on the firm-level resources with which it can be bundled, furthermore, the authors argue that the extent to which firms benefit from their spillover network hinges on specific intraorganizational factors—their scientific intensity and degree of downstream integration.