Knowledge Diversity, Transfer and Coordination: The Effect of Intrafirm Inventor Networks on the Speed of External Knowledge Recombination

We link the knowledge-based view of the firm and the social network approach to propose a theory of how intrafirm network characteristics affect the firm?s recombination speed in relation to the incorporation of technologically distant
external knowledge into its production of inventions. We start from the widely accepted view that distant, externally-developed knowledge is difficult to incorporate into the focal firm?s own production. We suggest that high levels of intrafirm network diversity, tie strength, and network density are essential for a diversity of knowledge inputs, knowledge transfer, and coordinated actions which in turn, reduce the problems pertaining to the incorporation of distant knowledge. The results of an event history study of 113 pharmaceutical firms that engaged in technology in-licensing during 1986-2003 generally support our hypotheses.