Technological exploration: A longitudinal study of the role of recombinatory search and social capital in alliance network

A single research question motivates this dissertation: How do the alliances in which firms participate affect their technological exploration (i.e., creation of relatively novel technological knowledge)? In answering this question I employ two complementary theoretical lenses. First, drawing on the concept of recombinatory search I argue that access to technically diverse alliance partners provides the benefits of variety and an enlarged search space, leading to a positive effect on technological exploration. Second, building upon social capital theory I posit that the extent to which a firm's alliance partners are densely interconnected will generate trust and reciprocity among partners, increasing their cooperation in sharing knowledge. I predict that these benefits (or structural social capital), and thus network density, will have a positive effect on technological exploration. Similarly, I theorize that strong interfirm relationships generate trust, reciprocity and social identification. These benefits of strong ties, or relational social capital, lead to greater cooperation, the development of relation-specific routines, and joint problem solving efforts. Accordingly, I hypothesize that participation in strong alliances enhances technological exploration. Finally, I suggest that the advantages of network density and strong ties will improve a firm's ability to benefit from increasingly diverse partners. Longitudinal data on a panel of 57 global telecommunications equipment manufacturers covering the period 1987--1997 are used to test these predictions. Two equations are estimated, reflecting the two different levels of analysis inherent in this study: ego network level and alliance level. Patent data are used to measure the technological dissimilarity of alliance partners and firm-level technological exploration. The alliance data set was constructed from an extensive archival search of over 160,000 documents. Taken together, the findings of the study provide evidence that alliances do indeed effect firm exploration. Technological diversity had a positive effect on technological exploration (although this effect ultimately turned negative in the alliance-level model). Network density enhanced technological exploration and increased the positive effect of diversity on technological exploration. Alliance duration and the number of prior technology-sharing alliances with the same firm (used to operationalize tie strength) positively impacted firm technological exploration and enhanced the effect of technical diversity on technological exploration.