Taking the First Step — What Determines German Laser Source Manufacturers Entry Into Innovation Networks?

Abstract

Early access to technological knowledge embodied in an industry's innovation network can prove an important competitive advantage for firms. Surprisingly, not much is known about the determinants of their initial entry into such networks. We analyze the propensity of firms for entering the industry's innovation network and their timing in doing so. More precisely, we seek to shed some light on the factors affecting the length of the time-span between a firm's founding and its first cooperation event. We apply a unique longitudinal event history dataset based on the full population of German laser source manufacturers. Innovation network data stem from official databases providing detailed information on the organizations involved, the subject of joint research and development (R&D) efforts, as well as the start and end times of all publicly funded R&D projects between 1990 and 2010. Estimation results from an event history estimation model indicate that micro firms enter the network later than small or large firms. An in-depth analysis of the size effects for medium-sized firms provides some unexpected but highly interesting findings. The choice of cooperation type makes no significant difference to a firm's timing in entering the network. Finally, the analysis of geographical determinants shows that cluster membership can, but does not necessarily affect the timing of a firm's decision to cooperate.