Effect of networks on product innovation: empirical evidence from Indonesian SMEs

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Nurul Indarti
Theo Postma

Abstract

Innovative companies generally establish linkages with other actors and access external knowledge in order to benefit from the dynamic effects of interactive processes. Using data from 198 furniture and software firms in Indonesia, this study shows that the quality of interaction (i.e. multiplexity) as indicated by the depth of knowledge absorbed from various external parties and intensity of interaction (i.e., tie intensity) are better predictors of product innovation than the diversity of interaction.

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Author Biography

Nurul Indarti, Faculty of Economics and Business, Universitas Gadjah Mada

Senior lecturer at Department of Management, Faculty of Economics and Business