EXPRESS: Far-Reaching or Closely-Knit, Innovative or Complementary? – Network Configurations and Firm-Level Innovation in the German Energy Sector

Abstract

In this paper, we advocate a theoretical perspective that views the firm’s ego-network as a configuration of multiple interdependent attributes, each granting resource advantages that may complement or substitute one another. Collecting empirical data from the German energy industry and using fuzzy-set Qualitative Comparative Analysis (fsQCA), we explore how five major network attributes (size, diversity, strength, innovativeness, and complementarity) combine to impact firm-level innovation. Based on the empirical results, we specify the orchestrating themes that constitute the “internal” and “external” fit of network configurations. Concerning internal fit, we identify a distinct pattern of complementing and substituting relations between network attributes. Specifically, we find that innovation performance results from the firm’s network combining network size or partner diversity or tie strength, and partner innovativeness or partner complementarity. Concerning external fit, we demonstrate that depending on firm size and internal intellectual capital, there are different “optimal” network configurations for different types of firms.