Leveraging the digital layer: the strength of weak and strong ties in bridging geographic and cognitive distances

Abstract

Firms may seek non-redundant information through inter-firm relations beyond their geographic and cognitive boundaries (i.e., relations with firms in other regions and active in different fields). Little is known about the conditions under which firms benefit from this high-risk/high-gain strategy. We created a digital layer of 600,000 German firms by using their websites' textual and relational content. Our results suggest that strong relations (relations with common third partners) between firms from different fields and inter-regional relations are positively associated with a firm's innovation level. We also found that a specific combination of weak and strong relations confers greater innovation benefits.