Innovations, Status and Networks

To obtain and maintain competitive advantage, firms need to implement appropriate innovation strategies (i.e. exploration or exploitation) and acquire status in external networks. In this dissertation, I investigate how innovation strategy, status, and network structure jointly affect the performance and behavior of firms. In particular, I combine theories on exploration and exploitation, innovation, networks, and the status-based perspective to investigate (1) how exploration interacts with status to affect the performance of high-tech firms; (2) how exploration and exploitation shape partner selection for strategic alliance; (3) how the exploration or exploitation of an invention determines its value in technology markets, and what effect team characteristics have on that value; and (4) how competition networks affect firm performance directly, and how collaboration and competition networks interplay. The findings from the four empirical studies show that status is an important factor in terms of how exploration and exploitation affect a firm’s performance and its propensity to act in certain ways. Hence, scholars should place more emphasis on the status-based approach as it is more likely to lead to a better understanding of the effects of particular strategic choices. Analysis at the invention level shows that the balance between exploration and exploitation in an invention determines its value in technology markets and the likelihood that it will become a technological breakthrough. Finally, my dissertation also contributes to network theory by drawing attention to competition networks, whose effects haven’t been given sufficient consideration.