Abstract
CEOs and the influence of their social networks have been considered as important drivers for firm innovation. Yet, both theories and empirical evidence are lacking. To advance this stream of research, we study the effects of CEO network closeness and structural holes on exploratory innovation. Drawing from both structural embeddedness theory and structural holes theory, we argue that CEOs who are deeply embedded in executives’ networks (higher network closeness) evaluate exploratory initiatives from a narrower perspective which makes them more selective in pursuing exploratory innovation. Further, we argue that structural holes propel CEOs to pursue more exploratory innovation, yet such effect of structural holes is attenuated by structural embeddedness. We test our hypotheses with a sample of 7,543 firm-year observations with 1,101 public U.S. firms from 2000 to 2014. The results show that CEO network closeness has a predominantly negative relationship with exploratory innovation. Further, the degree of structural holes has a positive relationship with exploratory innovation, but the relationship turns negative at high degrees of closeness. Our study contributes to research on strategic leadership, interfirm networks, and technological innovation.
| Original language | English |
|---|---|
| Title of host publication | Academy of Management Proceedings |
| Volume | 2023 |
| Edition | 1 |
| Publication status | Published - Aug 2023 |