The strength of long ties and the weakness of strong ties: Knowledge diffusion through supply chain networks

Yasuyuki Todo; Petr Matous; Hiroyasu Inoue

doi:10.1016/j.respol.2016.06.008

The strength of long ties and the weakness of strong ties: Knowledge diffusion through supply chain networks

Yasuyuki Todo^*, Petr Matous, Hiroyasu Inoue

^*Corresponding author for this work

School of Political Science and Economics

Research output: Contribution to journal › Article › peer-review

60 Citations (Scopus)

Abstract

Using a large firm-level panel dataset for Japan, this paper examines the effects of the structure of supply chain networks on productivity and innovation capability through knowledge diffusion. We find that ties with distant suppliers improve productivity (as measured by sales per worker) more than ties with neighboring suppliers, which is likely because distant firms’ intermediates embody more diversified knowledge than those from neighboring firms. Ties with neighboring clients improve productivity more than ties with distant clients, which is likely because neighboring clients more effectively diffuse disembodied knowledge than distant clients. By contrast, ties with distant suppliers and clients improve innovative capability (as measured by the number of registered patents), whereas ties with neighboring suppliers or clients do not affect innovative capability. In addition, the density of a firm's ego network (as measured by how densely its supply chain partners transact with one another) has a negative effect on productivity and innovative capability, implying knowledge redundancy in dense networks. These results suggest that access to diversified ties is important for improving productivity and innovation capability through knowledge diffusion.

Original language	English
Pages (from-to)	1890-1906
Number of pages	17
Journal	Research Policy
Volume	45
Issue number	9
DOIs	https://doi.org/10.1016/j.respol.2016.06.008
Publication status	Published - 2016 Nov 1

Keywords

Innovation
Knowledge diffusion
Networks
Productivity
Supply chains

ASJC Scopus subject areas

Strategy and Management
Management Science and Operations Research
Management of Technology and Innovation

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10.1016/j.respol.2016.06.008

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title = "The strength of long ties and the weakness of strong ties: Knowledge diffusion through supply chain networks",

abstract = "Using a large firm-level panel dataset for Japan, this paper examines the effects of the structure of supply chain networks on productivity and innovation capability through knowledge diffusion. We find that ties with distant suppliers improve productivity (as measured by sales per worker) more than ties with neighboring suppliers, which is likely because distant firms{\textquoteright} intermediates embody more diversified knowledge than those from neighboring firms. Ties with neighboring clients improve productivity more than ties with distant clients, which is likely because neighboring clients more effectively diffuse disembodied knowledge than distant clients. By contrast, ties with distant suppliers and clients improve innovative capability (as measured by the number of registered patents), whereas ties with neighboring suppliers or clients do not affect innovative capability. In addition, the density of a firm's ego network (as measured by how densely its supply chain partners transact with one another) has a negative effect on productivity and innovative capability, implying knowledge redundancy in dense networks. These results suggest that access to diversified ties is important for improving productivity and innovation capability through knowledge diffusion.",

keywords = "Innovation, Knowledge diffusion, Networks, Productivity, Supply chains",

author = "Yasuyuki Todo and Petr Matous and Hiroyasu Inoue",

note = "Funding Information: This research was conducted as part of a project entitled {\textquoteleft}Empirical Analysis on Determinants and Impacts of Formation of Firm Networks,{\textquoteright} undertaken at the Research Institute of Economy, Trade, and Industry (RIETI). The authors would like to thank RIETI for providing the firm-level data used in the analysis. Financial support from JSPS Kakenhi Grant (No. 25101003 and 26245037 for Todo and Matous, and No. 24530506 and 15K01217 for Inoue) is gratefully acknowledged. Comments from two anonymous referees that substantially clarified the argument of this paper are gratefully acknowledged. The authors would also like to thank Martin Everett, Masahisa Fujita, Akie Iriyama, Johan Koskinen, Toshiyuki Matsuura, Masayuki Morikawa, Garry Robins, Yukiko Saito, Iichiro Uesugi, Ryuhei Wakasugi and seminar participants at the University of Tokyo, RIETI, Waseda University, and the Western Economic Association International Annual Meetings for their helpful comments. The opinions expressed and arguments employed in this paper are the sole responsibility of the authors and do not necessarily reflect those of RIETI, University of Hyogo, the University of Sydney, Waseda University, or any institution with which the authors are affiliated. Publisher Copyright: {\textcopyright} 2016 The Author(s)",

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doi = "10.1016/j.respol.2016.06.008",

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T1 - The strength of long ties and the weakness of strong ties

T2 - Knowledge diffusion through supply chain networks

AU - Todo, Yasuyuki

AU - Matous, Petr

AU - Inoue, Hiroyasu

N1 - Funding Information: This research was conducted as part of a project entitled ‘Empirical Analysis on Determinants and Impacts of Formation of Firm Networks,’ undertaken at the Research Institute of Economy, Trade, and Industry (RIETI). The authors would like to thank RIETI for providing the firm-level data used in the analysis. Financial support from JSPS Kakenhi Grant (No. 25101003 and 26245037 for Todo and Matous, and No. 24530506 and 15K01217 for Inoue) is gratefully acknowledged. Comments from two anonymous referees that substantially clarified the argument of this paper are gratefully acknowledged. The authors would also like to thank Martin Everett, Masahisa Fujita, Akie Iriyama, Johan Koskinen, Toshiyuki Matsuura, Masayuki Morikawa, Garry Robins, Yukiko Saito, Iichiro Uesugi, Ryuhei Wakasugi and seminar participants at the University of Tokyo, RIETI, Waseda University, and the Western Economic Association International Annual Meetings for their helpful comments. The opinions expressed and arguments employed in this paper are the sole responsibility of the authors and do not necessarily reflect those of RIETI, University of Hyogo, the University of Sydney, Waseda University, or any institution with which the authors are affiliated. Publisher Copyright: © 2016 The Author(s)

PY - 2016/11/1

Y1 - 2016/11/1

N2 - Using a large firm-level panel dataset for Japan, this paper examines the effects of the structure of supply chain networks on productivity and innovation capability through knowledge diffusion. We find that ties with distant suppliers improve productivity (as measured by sales per worker) more than ties with neighboring suppliers, which is likely because distant firms’ intermediates embody more diversified knowledge than those from neighboring firms. Ties with neighboring clients improve productivity more than ties with distant clients, which is likely because neighboring clients more effectively diffuse disembodied knowledge than distant clients. By contrast, ties with distant suppliers and clients improve innovative capability (as measured by the number of registered patents), whereas ties with neighboring suppliers or clients do not affect innovative capability. In addition, the density of a firm's ego network (as measured by how densely its supply chain partners transact with one another) has a negative effect on productivity and innovative capability, implying knowledge redundancy in dense networks. These results suggest that access to diversified ties is important for improving productivity and innovation capability through knowledge diffusion.

AB - Using a large firm-level panel dataset for Japan, this paper examines the effects of the structure of supply chain networks on productivity and innovation capability through knowledge diffusion. We find that ties with distant suppliers improve productivity (as measured by sales per worker) more than ties with neighboring suppliers, which is likely because distant firms’ intermediates embody more diversified knowledge than those from neighboring firms. Ties with neighboring clients improve productivity more than ties with distant clients, which is likely because neighboring clients more effectively diffuse disembodied knowledge than distant clients. By contrast, ties with distant suppliers and clients improve innovative capability (as measured by the number of registered patents), whereas ties with neighboring suppliers or clients do not affect innovative capability. In addition, the density of a firm's ego network (as measured by how densely its supply chain partners transact with one another) has a negative effect on productivity and innovative capability, implying knowledge redundancy in dense networks. These results suggest that access to diversified ties is important for improving productivity and innovation capability through knowledge diffusion.

KW - Innovation

KW - Knowledge diffusion

KW - Networks

KW - Productivity

KW - Supply chains

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The strength of long ties and the weakness of strong ties: Knowledge diffusion through supply chain networks

Abstract

Keywords

ASJC Scopus subject areas

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