Inter-organizational collaboration and optimal cognitive proximity: Moderating effect of knowledge complexity

As a result of increased specialization due to the expansion of human knowledge, collaborative learning to acquire new knowledge is becoming important. In order to find partners for effective learning, organizations need to consider the optimal level of cognitive proximity considering the complexity of the field of collaboration. This study examines the two-sided effects of cognitive proximity in the context of collaborative innovation, focusing on the moderating effect of knowledge complexity. Utilizing USPTO patent data of US biotechnology sector, this research confirmed an inverse U-shaped effect of cognitive proximity on collaborative innovation. The optimal level of cognitive proximity increases with higher level of knowledge complexity, which shows positive moderating effect of complexity on the proximity effect. The marginal effect of cognitive proximity also increases in complex fields, indicating that proximity plays stronger role as knowledge complexity increases. This indicates that while cognitive proximity enhances knowledge absorption, the presence of knowledge complexity hinders knowledge diffusion. Organizations that share more complex knowledge can achieve optimal collaborative performance by partnering with cognitively close counterparts. However, collaboration performance is lower than lower complex fields, even if organization achieve optimal cognitive distance. These insights offer valuable implications for collaboration strategies for organizations and provide guidance for policymakers and stakeholders in fostering innovation networks and creating supportive ecosystems.