A simulation study of the relationship between properties of knowledge and firm innovation performance

Building on previous research, this paper argues that a company's absorptive capacity to improve its innovation performance will depend on sound management of its available outside network knowledge. Consequently, this study develops a research simulation model that links the properties of knowledge obtained from outside network, firm's absorptive capacity and the features of a firm's knowledge network topology to predict innovation performance. We find that the interaction between properties of knowledge, absorptive capacity and network topology has significant, positive effects on firm innovation performance.