When is betweenness centrality useful to firms pursuing technological diversity? An internal-resources view

ABSTRACT

This study examines situations in which betweenness centrality (BC) is useful for firms pursuing technological diversity. Given the role of BC in firms’ access to external technological knowledge, the study explores the extent to which R&D and manufacturing resources, technological strength, and financial slack moderate the relationship between BC and technological diversity. The results show that BC alone does not exert a positive effect on technological diversity. Furthermore, R&D resources, technological strength, and financial slack each positively moderate the relationship between BC and technological diversity, whereas manufacturing resources do not. Identifying the influential moderators of internal resources should enable firms to harness the benefits of BC. Thus, firms should possess such internal resources to further their technological diversity through BC.

KEYWORDS:

• Technology alliances
• technological diversity
• external technological knowledge
• betweenness centrality
• internal resources

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Hsien-Che Lai received his Ph.D. degree in Management of Technology from National Chiao Tung University, Taiwan, in 2005. He is now an associate professor of the Department of Business & Management, National University of Tainan, Taiwan. His research interest is technology innovation and strategy.

Notes

1 To further examine the potential of the dark side of a high level of BC, I have additionally estimated whether BC has an inverted U-shaped relationship with a focal firm's technological diversity among the 231 sample firms in 1998–2006. When I added the BC squared to the regression models (Model 1–6), the results of analysis ensure that BC squared does not have a significant effect on Technological diversity (the estimated coefficient is 0.051, the standard error is 0.073, and the p-value > 0.1). Although Gilsing et al. (2008) showed that moderate BC is more advantageous for promoting a firm's explorative innovation, this study confirmed that neither the independently linear effect nor the curvilinear effect of BC is sufficient to influence a firm's technological diversity.