Heterogeneity, Brokerage and Innovative Performance: Endogenous Formation of Collaborative Inventor Networks

Abstract

In this study I examine how past performance influences the relative positions of actors in a network and how the actor-level heterogeneity in quality mediates the often-demonstrated association between brokerage and performance. On the collaboration network of U.S. biotech inventors during 1976-1995, I find that inventors with superior track records are more apt to form collaboration ties that enhance brokerage, thereby occupying positions that allow them to broker across network boundaries. Controlling for past performance significantly weakens the positive relationship between brokering position and innovative performance. Further, when inventor-level heterogeneity is controlled for through inventor-fixed effects, the position-performance correlation disappears. These findings suggest that, at least for collaborative inventors, actor-level heterogeneity such as performance history largely drives the asymmetry in brokerage, explaining most of the position-performance association.

Keywords: social networks, innovation, brokerage, heterogeneity, performance, endogeneity