How tie strength in alliance network affects the emergence of dominant design: the mediating effects of exploration and exploitation innovation

ABSTRACT

Drawing on social network theory and technological innovation literature, this study investigates how firm innovation mediates the relationship between tie strength of alliance network and the probability of producing dominant designs. We argue that strong ties facilitate both exploratory and exploitative innovation, which enables firms to produce dominant designs. We test the hypotheses with data from the Chinese automotive industry during 2004 and 2012. The findings suggest that strong network ties help producing dominant designs through facilitating exploitative but not exploratory innovation. This study reveals how the social networks, as important resources, influence firm performance in the competition to produce a dominant design. Firms must engage in innovation activities, especially exploitative innovation activities, to realise the value of their networks.

KEYWORDS:

• Dominant design
• exploratory innovation
• exploitative innovation
• alliance network

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The National Natural Science Foundation of China [grant number: 71932005, 72074070, 71902059, 72002070 and 72004036] and the Science Research Foundation for Education Department of Hunan Province [grant number: 17B287].

Notes on contributors

Jing Yang

Jing Yang is currently a PhD student at Hunan University in China. She received her master degree at University of East Anglia in UK. She has ever been a lecturer at Central South University of Forestry and Technology in China. Her research area is technological innovation management and knowledge management.

Deming Zeng

Deming Zeng received his PhD from university of Twente in 1998. He is currently a Professor in school of Business Administration at Hunan University. His main research interests include technological innovation management and knowledge management.

Jing Zhang

Dr Jing Zhang is an associate professor at Old Dominion University in US. She has worked for Iowa State University, City University London and Lancaster University in England and Legend Co.in Beijing, China. Her primary research interests deal with technological innovation, knowledge management and entrepreneurship.

Haiwen Dai

Haiwen Dai received her PhD from school of Business Administration at Hunan University in China. She is currently a lecturer at Guangdong University of Technology in China. Her research area is technological innovation management and knowledge management.