Homophily and Consolidation in Intra-Firm Collaboration Networks and their Impact on Innovation Output

Valentina Assenova and Luis Rios, Management, The Wharton School

Abstract: Research in management science has long posited that network structures, specifically the patterns of informal interactions among people, affect information flows and knowledge recombination. Yet, how do different network topologies affect the production of new knowledge and ideas? What features of network topologies are most closely associated with firms’ ability to exploit existing resources and knowledge in the production of ideas, as compared to exploring and developing entirely novel and original ideas? We will use data on 400 firms in the U.S. economy over 10 years to explore the empirical relationship between firms’ internal collaboration networks among employees and their external innovation outputs, such as patents and patent citations. Drawing on prior theories of network structure, we develop hypotheses relating two features of internal networks, homophily and consolidation, to innovation output. We then test the effects of homophily and consolidation on: (i) the quantity of innovations produced and (ii) the novelty of these innovations.

Michelle Eckert is Marketing and Communications Coordinator for the Mack Institute, where she works to engage students, researchers, and corporate partners in opportunities for collaboration. Michelle received her B.A. in Art from Valparaiso University in 2007. Her background includes two AmeriCorps terms of service working to teach mathematics, computer literacy, and job readiness skills to out-of-school youth in Philadelphia, focusing particularly on promoting access to post-secondary education.