The interaction between inter firm and interlocking directorate networks on firm's new product development outcomes
This paper explores the interaction between a prominent board of directors and the network of inter firm relationships on new product development. Specifically, we posit a positive interaction effect between a prominent board and the inter firm network and structural holes positions on the number of new products developed by the firm. We test the theoretical framework on a sample of 1758 agreements among 1890 biopharmaceutical firms over the period 2006 2010. We find that by filtering, complementing and legitimizing information coming from the inter firm network, a prominent interlocking directorate network can improve the inter firm network's effects on new product development. We discuss important implications for how inter personal networks (such as the board interlock directorate network) help to develop the effectiveness of inter firm relationship networks in achieving new product development outcomes.