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Network ties and entrepreneurial orientation: Innovative performance of SMEs in a developing country

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Abstract

This study investigates the role of intra-cluster ties, extra-cluster ties, and entrepreneurial orientation in shaping firms’ innovative performance. We conduct our analysis on a primary data set of 120 small and medium enterprises located in the Cibaduyut footwear-manufacturing cluster, Indonesia. We explore the effectiveness of knowledge acquisition through intra-cluster ties and extra-cluster ties on innovative performance. We find that extra-cluster ties mediate the relationship between proactiveness and innovative performance. Also, a combination of high extra-cluster ties and risk taking exert a positive impact on innovative performance. Surprisingly, we find that risk taking negatively moderates the influence of intra-cluster ties on innovative performance. Over-reliance on within-cluster knowledge sharing may result in the diffusion of redundant knowledge rather than making new knowledge available to the firm. Overall, our findings point to the synergistic effects of entrepreneurial orientation and extra-cluster ties on innovative performance.

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Notes

  1. The geographic scope of a cluster can range from a single city, a state, a country or even a group of neighbouring countries (Bathelt 2004; Bathelt et al. 2004).

  2. We thank an anonymous referee for some arguments herein on the dangers posed by network ties.

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Acknowledgments

An earlier version of this paper was presented and nominated for the best paper award at the 6th Annual Conference of the Academy of Innovation and Entrepreneurship 2013, University of Oxford- United Kingdom. We thank participants of this conference for their comments and suggestions.

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  1. Department of Business Administration, Parahyangan Catholic University, Ciumbuleuit 90, Bandung, 40141, Indonesia

    Theresia Gunawan

  2. Grenoble Ecole de Management, 12 rue Pierre Sémard (F307), 38000, Grenoble, France

    Jojo Jacob

  3. Department of Economics and Management, Tilburg University, P.O. Box 90153, 5000 LE, Tilburg, The Netherlands

    Geert Duysters

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  1. Theresia Gunawan
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Correspondence to Theresia Gunawan.

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Gunawan, T., Jacob, J. & Duysters, G. Network ties and entrepreneurial orientation: Innovative performance of SMEs in a developing country. Int Entrep Manag J 12, 575–599 (2016). https://doi.org/10.1007/s11365-014-0355-y

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