Bridging the gap: citizenship diversity and global innovation networks in small and medium size companies

ABSTRACT

Recent literature stresses the increasing importance of global innovation networks (GINs) as a mechanism to organize innovation across geographical space. This paper investigates why and to what extent citizenship diversity of the firm's employees relates to the engagement of small and medium size companies in GINs. Citizenship diversity provides knowledge about the institutional context of other countries, increased capabilities to deal with institutional differences, larger social networks to build GINs and a broader search space. Further, the paper examines how the absorptive capacity of firms mediates the relationship between citizenship diversity and GINs. The empirical study is based on a linked employee-employer dataset with 6,771 observations of innovative small and medium size firms in Sweden. It provides strong evidence that the engagement in GINs is positively related to citizenship diversity, depending, however, on the absorptive capacity of firms.

KEYWORDS:

• Global innovation networks
• citizenship diversity
• absorptive capacity
• open innovation
• institutions

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Markus Grillitsch http://orcid.org/0000-0002-8406-4727

Cristina Chaminade http://orcid.org/0000-0002-6739-8071

Notes

1 The authors refer to partners in general, without specifying the type of partnership or if the partnership is related to innovation. Additionally, the authors do not make a distinction between international and global networks.

2 A particular subset of literature focuses only on the diversity of the top management. Carpenter & Fredrickson (2001), using data of US firms, find that the diversity of the top management team is positively related to a higher propensity to pursue innovative strategies in global markets. Barkema & Shvyrkov (2007) provide evidence that diversity of the top management team has a positive impact on the foreign expansion of the firm but that the final effect is mediated by the tenure of the team as well as the cultural distance between the different managers. Caligiuri, Lazarova, & Zehetbauer (2004) find that the diversity of nationalities among top managers positively influences the propensity to internationalize through exports, foreign direct investments and through recruitment. Furthermore their evidence shows that diversity of the top management team has special impact on the breath of internationalization, that is the number of countries in which the firm operates which, in turn, as discussed earlier has a higher impact on productivity (Kafouros et al., 2012).

3 Diversity in educational level is however negatively associated with performance (Bell et al., 2010).

Additional information

Funding

This work was supported by Marianne and MarKus Wallenberg Foundation [grant number 2012.0194].