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Relationship between Technological Diversification of Social Network and Technological Innovation Performance: Empirical Evidence from China

Previous literatures about the relationship between social network and technological innovation performance were mostly from the perspective of network structure characteristics, while rarely considering the effect of composition of a firm’s social network on technical innovation. This paper provides models to examine the relationship between technological diversification and technological innovation performance, as well as the moderating effects of absorptive capability. Using survey data from a sample of 134 Chinese machinery and equipment manufacturing firms, the empirical results showed that there was an inverted U-shaped relationship between the technological diversification and technological innovation performance, indicating that technological diversification of network made the highest technological innovation performance. We also found that all three dimensions (identification & acquisition, assimilation & absorption and transformation & exploitation) of absorptive capacity had significant positive effect on technological innovation performance, and the stronger the first two dimensions was, the higher value the technological innovation performance with technological diversification got. Enterprise managers were suggested to weigh the technological diversification and specialisation of the technological development in practice, as well as strengthen their absorptive ability that would reap the highest technological innovation performance. In sum, theoretical research was enriched about the relationship between technological diversification of social network analysis and technological innovation; on the other hand, guidelines for enterprise technology development in practice were provided.