Abstract: We analyze transfer channels of radical innovations launched by small and medium-sized firms (SMEs) using an ego network approach. Based on a unique longitudinal dataset covering the observation period 1996–2016, we identify and trace back radical innovations of SMEs in German Biotech in order to analyze the extent to which SMEs themselves—or eventually also other organizations in their direct cooperation surrounding—benefit from radical innovations in terms of subsequent innovation performance. Results from negative binomial panel regressions indicate that direct cooperation partners of radical innovators show higher innovative performance than partners of the control group, i.e., statistical twin firms without radical innovations. Our results confirm that radical innovations initiate a positive impulse for innovation through direct cooperative relationships. Interestingly, geographical proximity does not play a role, and especially technologically different partners benefit from direct cooperation with radical innovators.
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