Website Anne ter Wal

Evolution of networks within and beyond clusters

Ter Wal, A.L.J. & R.A. Boschma (2011), Co-evolution of firms, industries and networks in space. Regional Studies, in press (doi)

Co-evolution of firms, industries and networks in space, Regional Studies. The cluster literature suffers from a number of shortcomings: (1) it often neglects that cluster firms are heterogeneous in terms of capabilities; (2) it tends to overemphasize the importance of geographical proximity and underestimates the role of networks; and (3) it hardly addresses the origins and evolution of clusters. The authors propose a theoretical framework that brings together the literature on clusters, industrial dynamics, the evolutionary theory of the firm, and network theory. It is described how clusters co-evolve with: (1) the industry with to they adhere; (2) the capabilities of the firms they contain; and (3) the industry-wide knowledge network of which they are part.

Ter Wal, A.L.J. & R.A. Boschma (2009), Applying social network analysis in economic geography: framing some key analytic issues. Annals of Regional Science 43 (3), in press (doi).

Social network analysis attracts increasing attention in economic geography. We claim social network analysis is a promising tool for empirically investigating the structure and evolution of inter-organizational interaction and knowledge flows within and across regions. However, the potential of the application of network methodology to regional issues is far from exhausted. The aim of our paper is twofold. The first objective is to shed light on the untapped potential of social network analysis techniques in economic geography: we set out some theoretical challenges concerning the static and dynamic analysis of networks in geography. Basically, we claim that network analysis has a huge potential to enrich the literature on clusters, regional innovation systems and knowledge spillovers. The second objective is to describe how these challenges can be met through the application of network analysis techniques, using primary (survey) and secondary (patent) data. We argue that the choice between these two types of data has strong implications for the type of research questions that can be dealt with in economic geograhy, such as the feasibility of dynamic network analysis.

Boschma, R.A. & A.L.J. ter Wal (2007), Knowledge networks and innovative performance in an industrial district: the case of a footwear district in the South of Italy. Industry and Innovation 14 (2), pp. 177-199 (doi).

The traditional district literature tends to assume that: (1) the competitiveness of firms depends on external sources of knowledge; (2) all firms in a district benefit from knowledge externalities; (3) relying on external knowledge relationships necessarily means these are confined to the district area. Our case study of the Barletta footwear district in the South of Italy suggests otherwise. Based on social network analysis, we demonstrate that the local knowledge network is quite weak and unevenly distributed among the local firms. A strong local network position of a firm tended to increase their innovative performance, and so did their connectivity to extra-local firms. So, it mattered being connected either locally or non-locally: being co-located was surely not enough. Having a high absorptive capacity seemed to raise only indirectly, through non-local relationships, the innovative performance of firms.

Ter Wal, A.L.J. (2011), Cluster emergence and network evolution: a longitudinal analysis of the inventor network in Sophia-Antipolis. Regional Studies, in press (doi)

It is increasingly acknowledged that clusters do not necessarily exhibit networks of local collective learning. Through a case-study of Sophia-Antipolis this study investigates to what extent networks of collective learning emerged throughout the growth of the business park. A longitudinal analysis of the inventor networks of its two main sectors reveals that a local network of collective learning emerged only in Information Technology and not in Life Sciences. Through the creation of spin-offs and high-tech start-up firms the initial dominance of large multinationals decreased only in Information Technology. This suggests that small firms play an important role in establishing local networks.

Ter Wal, A.L.J. (2010), The dynamics of inventor networks in biotechnology: geographical proximity versus triadic closure. Best Paper Proceedings of the 2010 Academy of Management Meeting.

This paper intends to contribute to the growing literature on network dynamics by critically assessing the spatial component in the dynamic analysis of networks. The paper juxtaposes geographical proximity and triadic closure - i.e. the formation of closed triangles - as two alternative mechanisms in the evolution of networks. It argues that the role of both mechanisms is subject to change over time as the technological regime of an industry changes. More precisely, the paper proposes that geographical proximity between inventors is mostly relevant for tie formation in the early stage of the industry, when knowledge is predominantly tacit. By contrast, the closed triangles as produced by triadic closure act as vehicles of trust gaining relevance once the industry gets more established, with higher levels of knowledge codification and the associated risk of unintended and costly knowledge leakages. These trends are empirically tested taking biotechnology in Germany as an example of an evolving, spatially agglomerated knowledge-intensive industry. On the basis of a patent-based reconstruction of the inventor network and a stochastic estimation model of network evolution, the study confirms that geographical proximity becomes less important and triadic closure more important over time as a determinant of tie formation.

Venture capital syndication networks

Alexy, O., J. Block, P.G. Sandner, A.L.J. Ter Wal (2011), Social Capital of Venture Capitalists and Start-Up Funding. Small Business Economics, in press (doi).

How does the social capital of venture capitalists (VCs) affect the valuation of start-ups? Based on the social capital literature, we hypothesize a positive effect of VCs’ social capital, derived from past syndication, on the amount of money they put in new ventures. Our results indicate that both structural aspects, such as the number of connections, and relational aspects, such as the diversity of network partners’ attributes, of VCs’ social networks matter. While generally exhibiting positive effects, our results highlight that the role and effect of VCs’ social capital are much more complex than previously thought.

Intra-organizational knowledge-sharing

Criscuolo, P., A. Salter, A.L.J. Ter Wal (2010), The role of proximity in shaping knowledge sharing in professional services firms. DRUID Conference Paper 2010 (pdf).

Knowledge sharing among colleagues is critical to the competitiveness of professional services firms. Yet the mechanisms that lead one professional to seek advice from a colleague remain poorly understood. In order to probe the micro-foundations of knowledge sharing in these environments, this paper explores how different forms of proximity shape the likelihood that two colleagues will share knowledge. Building on theories of proximity, we suggest – and empirically substantiate – that cognitive proximity is curvilinearly related to the probability of knowledge sharing. We also show how this curvilinear relationship is moderated by other forms of proximity: geographical, social and organizational. We examine trade-offs between different forms of proximity in an attempt to unpack the cognitive, organizational and geographical dimensions of knowledge sharing in organizational networks. We explore the implications of our findings for theories of organizational design and knowledge management, and for managerial practice.