Publications

Book Chapter

The role of knowledge in firm strategy and performance is well documented in the literature. There are numerous theoretical and empirical studies examining the relationship between knowledge and firm performance.

The essence of these studies is that the higher the level of knowledge acquired or accumulated, the greater the level of firm innovation and performance. For example, Liebeskind et al. (1996) and Powell et al. (1996) investigated the role of social networks and found that they were important sources of learning and innovation for firms. In recent studies, Lane et al., (2001) found that knowledge acquired by an IJV from its parent company contributed to its performance, and Yli-Renko et al. (2001) found that knowledge acquisition contributed significantly to new product development.

In this study, the authors examine an element of knowledge acquisition that is not addressed in previous studies - that of the quality of the acquired knowledge. They examine not only the frequency of knowledge acquisition but whether the knowledge being acquired is useful to the firm and innovative in terms of its newness and novelty. The study incorporates three components - first, they investigate the impact of knowledge quality on two measures of firm performance - innovation and financial performance. Second, they investigate the antecedents to knowledge quality, examining the impact of the formal and informal networks (building on the work of network and social capital theorists such as Granovetter, 1992 and Nahapiet and Ghoshal, 1998) and Cohen and Levinthal's (1990) concept of absorptive capacity. Third, their data allows them to investigate the specific sources of useful and innovative knowledge, which provides them with a richer understanding of knowledge sourcing behaviours of organizations.