Towards a Dynamic Model of Networks and Innovation

In the knowledge society innovation plays a key role in determining a firm’s competitive advantage. Simultaneously interorganizational alliances have grown over the last decade. These two factors combined place alliances’ contribution to the innovative capabilities of the firm as an important question within organization studies. Most of the literature within the field has exclusively examined singular causal relationships, which have obscured the recursive dynamics that appear when multiple causal relationships are taken into consideration. Combining evidence from multiple studies suggests a Matthew effect, where dominant firms constantly increase their innovativeness, centrality, and status. In the long run this development might, however, be dysfunctional due to network closure, and limited access for young firms to enter into the network.