Examining the influence of structural holes and closed networks on innovation performance, this paper argues that closed networks are more favorable for innovation performance than open networks. Based on a comprehensive theoretical overview of characteristics, we suggest that a lower number of structural holes will augment the innovation performance of networking firms in our sample of R&D alliances in the consumer electronics industry. Potential benefits of both the structural holes theory as well as the opposing network approach of closed networks contribute to this proposition. Our findings also show that closed networks increase innovation performance in R&D networks. Thereby, we suggest that the prevalence of mainly collectivist-oriented players in this industry has influenced our results due to the specific cultural contexts and environments of the collaborating firms.
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