NETWORKS, KNOWLEDGE SPILLOVERS AND TECHNOLOGICAL PROGRESS OF FIRMS: SIMULATIONS IN AN EVOLUTIONARY FRAMEWORK

Following modern innovation theory, this paper analyses in an evolutionary framework the impact of information network structures on firms' absorptive capacities and induced realization of technological progress (t.p.) in a finite set of firms. Main results of simulation analyses are: (i) At the macro-level average speed of firms' realized t.p. depends on global network structures, i.e. a high local size and centralization, but a low clustering of a networks. (ii) Networks are only important if firms' direct R&D activities are moderately successful. (iii) A free-rider problem arises, i.e. collectively, firms have high incentives to form interfirm network ties, but not individually.