Explorative and exploitative learning strategies in technology-based alliance networks

Although the literature converges regarding the reasons why and how networks of technology alliances are formed, there is still lack of agreement on what constitutes an optimal network structure, once it has been formed. The aim of this paper is to fill this void and to determine what constitutes an optimal network structure for exploration and exploitation. To study this, we differentiate among a firm’s direct ties, indirect ties and the redundancy among them. Analyzing their role in the pharmaceutical, chemical and automotive industry we show that the exploration-exploitation distinction forms an important factor for understanding a firm’s optimal network structure, and that the differences in network optimality between both tasks is one of degree. Moreover, we find that this differential role of a firm’s alliance network remains invariant across the three industries, enhancing the generalisability of the empirical results. Finally we discuss an important new insight that arises from some unexpected findings