Interaction Effect of Network Structure and Knowledge Search on Knowledge Diffusion

Abstract

This paper models knowledge diffusion on an inter-organizational network. Based on literatures related to knowledge diffusion, the model considers critical factors that affect diffusion behavior including nodal property, relational property, and environmental property. We examine the relationships among network structure, knowledge search, and diffusion performance. Through a massive simulation runs based on the agent-based model, we find that the average path length of a network decreases a firm's cumulative knowledge stock, whereas the clustering coefficient of a firm has no significant relationship with the firm's knowledge. We also find that there is an interaction effect of network structure and the range of knowledge search on knowledge diffusion. Specifically, in a network of a larger average path length (APL) the marginal effect of search conduct is significantly greater than in that of a smaller APL.