Hitchhiking in board interlocks? The externality of partner innovation

Abstract

Purpose

This study explores the influence of partner innovation in board interlock networks on a firm's innovation tendency.

Design/methodology/approach

This study collects a sample of publicly listed Chinese firms from 2008 to 2017 and uses fixed-effects ordinary least squares regressions to analyze the data.

Findings

This study shows that interlocking partners with different innovation levels than that of the focal firm affect its innovation tendency in distinct ways. For more innovative partners, the innovation level has a U-shaped effect on the focal firm's innovation tendency. In the case of less innovative partners, the innovation level facilitates the focal firm's innovation tendency.

Originality/value

Going beyond previous research that emphasized the role of interorganizational networks in facilitating firm innovation through a unitary learning effect, this study differentiates network partners into two categories based on their relative level of innovation compared with the focal firm and takes the hitchhiking effect into account to highlight potential obstacles in the learning process depending on the innovation conditions of partners. The study advances the literature on organizational learning, social networks and innovation.

Citation

Jiang, Y., Zhao, Y. and Dang, B. (2023), "Hitchhiking in board interlocks? The externality of partner innovation", Management Decision, Vol. 61 No. 3, pp. 770-785. https://doi.org/10.1108/MD-11-2021-1512