Impact of network relational and structural embeddedness on firm's innovation : a study at the Saudi firm's level

Awarding institution
  • University of Strathclyde
Date of award
  • 2017
Thesis identifier
  • T14708
Person Identifier (Local)
  • 201389422
Qualification Level
Qualification Name
Department, School or Faculty
  • Firms are facing great challenges in the rapidly changing economy of today's world. Therefore, firms have begun searching for new means and ways to innovate in order to stay alive, compete and grow. However, many firms have yet to discover that their embedded network of relations and structures can play a crucial role in their innovation outcomes. As a result, there is growing consensus among innovation scholars that networking and inter-firm collaboration are key strategies in stimulating innovation within firms. This has resulted in a growing body of literature focused on studying the link between innovation performance and firm participation and position in networks. However, there is still disagreement and fragmented results among scholars regarding the optimum firm's network embeddedness configuration for both product and process innovation. Moreover, firms should be aware of the type of network embeddedness configurations that could constrain their innovation performance. This remains unresolved academic and practitioner challenges that require detailed investigation. Furthermore, a limited number of studies have theoretically discussed and empirically tested this research area in the context of emerging economies.This research study addresses the aforementioned challenges and aims to shed light on the relationship between firms' network embeddedness characteristics (i.e. relational embeddedness and structural embeddedness) and their innovation output (i.e. product and process innovation).;This study draws primarily on three complimentary perspectives-social capital, social network and network embeddedness-in order to shed more light on the effect that network embeddedness characteristics have on firms' product and process innovation. Furthermore, the thesis aims to both conceptually and empirically reveal the influence that network embeddedness aspects have on innovation outcomes in the context of emerging economies, with particular reference to medium and high (M&H) technology sectors in Saudi Arabia.The study draws on the significance of network embeddedness characteristics in influencing firms' innovation performance with the principle aim of unravelling key network relational and structural embeddedness characteristics at the firm's level. This research is primarily based on new empirical evidence from the primary source data of 121 firms in M&H technology sectors in Saudi Arabia, using social network analysis and logistic regression modelling to investigate the effect of various configurations of firms' network, relational and structural embeddedness characteristics on the types of innovation (i.e. product and process innovation). The results of this study indicate that firms' innovation outcomes largely depend on their various network relational and structural embeddedness configurations. As a result, in order to fully capture the impact of network embeddedness characteristics on firms' innovation outcomes, network relational and structural embeddedness characteristics should be jointly considered (i.e. the interaction effect among different network embeddedness settings).;The evidence reveals that, by analysing the combination of firms' relational and structural network embeddedness characteristics, firms can recognise the potential, associated effects in product and process innovation outputs. This is indicated by the interaction effect between network embeddedness relational aspects (i.e. strong/weak ties) and structural properties (i.e. dense/sparse network and peripheral/central position). For instance, the findings suggest that, for high-density and central network embeddedness, strong ties type of relations will have a positive impact on firms' product and process innovation. In contrast, the empirical analysis suggests that firms that are sparsely and peripherally embedded in a network will become better product and process innovators if they develop relationships with other organisations in terms of weak ties type of relations.The outcome of this research has both theoretical and practical implications. These implications are theoretical in the sense that they provide new insights into innovation networks area from the social capital, social network and network embeddedness perspectives, jointly considering firms' network relational and structural embeddedness characteristics, as well as the direct, and the interaction effect on firm's innovation outcome. Regarding managerial implications, this study highlights the primary network structural properties, specifically addressing their direct, interaction effect on firms' product and process innovation. This could guide professional managers aiming for high innovation performance to re-evaluate their firms' network embeddedness configurations. Furthermore, in light of this study's limitations, directions for future research are outlined.
Resource Type
Date Created
  • 2017
Former identifier
  • 9912566391002996