Intraorganizational Networks, Interorganizational Networks, and the Impact of Central Inventors: A Longitudinal Study of Pharmaceutical Firms

Abstract

This paper proposes that a mechanism through which a firm's location in the interorganizational network influences the firm's internal innovation activities is modifying the amount of information flowing within the firm. Exploring a firm's internal innovation activities, I hypothesized that structural centrality of an inventor in the intrafirm coinventing network is associated with her impact on her firm's innovation activities in an inverted-U-shape relation. I further hypothesized that this relationship is moderated by the firm's centrality and span of structural holes in the interfirm network. I found strong support for these hypotheses in a longitudinal study of eight large pharmaceutical firms. The findings in this paper, apart from having managerial implications, have implications for research on alliances, network studies, and innovation processes.