The Geography of Knowledge Sourcing, Personal Networks, and Innovation Effects: Evidence from the Biomedical Firms in Guangzhou, China

Abstract

Personal networks, in contrast to organizational relations, have recently increased their significance to firms by allowing them to acquire external knowledge and strengthen their innovation capacity. Hot debates on the geography and innovation effects of personal networks persist, but these discussions are mainly derived from research works on western economies. Since personal interactions are context-sensitive, this paper examines the geography and the innovation effects of personal networks on biomedical firms in Guangzhou, which has a unique political and socioeconomic context owing to the transitional nature of China. This case study indicates that the geographic nature of personal knowledge networks is largely locally-based, and the primary driver of such networks is experience-based practices, such as repeated face-to-face contacts, labor mobility, and shared life experience. Personal knowledge networks contribute to both problem-solving and radical innovation for firms as a result of the guanxi-based relations in China that transform personal networks into channels for mobilizing innovation-related resources. Moreover, by dividing personal networks into bonding, bridging, and linking networks, this paper also de-homogenizes personal networks and delineates specific and differentiated innovation effects of manifold social relationships. Based on the research findings, policy implications aiming at laying the social ground of innovation are addressed.