Knowledge Networks as Channels and Conduits: The Effects of Spillovers in the Boston Biotechnology Community

We contend that two important, nonrelational, features of formal interorganizational networks-geographic propinquity and organizational form-fundamentally alter the flow of information through a network. Within regional economies, contractual linkages among physically proximate organizations represent relatively transparent channels for information transfer because they are embedded in an ecology rich in informal and labor market transmission mechanisms. Similarly, we argue that the spillovers that result from proprietary alliances are a function of the institutional commitments and practices of members of the network. When the dominant nodes in an innovation network are committed to open regimes of information disclosure, the entire structure is characterized by less tightly monitored ties. The relative accessibility of knowledge transferred through contractual linkages to organizations determines whether innovation benefits accrue broadly to membership in a coherent network component or narrowly to centrality. We draw on novel network visualization methods and conditional fixed effects negative binomial regressions to test these arguments for human therapeutic biotechnology firms located in the Boston metropolitan area.