Cooperation, Network Characteristics, and Innovation Performance: A Study on Shanghai IT services Industry

Abstract

Social network analysis is becoming more and more prevalent in studying regional economies. This paper investigated the innovation performance of enterprises in IT services cluster using social network analysis techniques. Based on an empirical analysis of 102 research institutes and 710 enterprises providing IT services in Shanghai, China, we verify that cooperation with research institutes could boost the network position of an enterprise in its ego-network, featuring strong ties, a network broker position and a wider network scope. Regression results demonstrate that all these advantages have significant positive influence on the innovation performance of enterprises, which is partly in contrast with Granovetter's hypothesis concerning the "strength of weak ties". We also show that the background of an enterprise except firm age, has positive impacts on its innovation performance and some characteristics of its network structure. Both the firm size and its entrance duration have positive impacts on its cooperation with research institutes.