Title: Firms' collaboration networks benefitting innovation: embeddedness in high- and low-trust culture, Denmark and Iran

Authors: Mahya Bayat; Thomas Schøtt; Mohammad Reza Zali

Addresses: Faculty of Entrepreneurship, University of Tehran, Farshi Moghaddam St., Kargar Shomali St., 1439813141, Tehran, Iran ' Department of Entrepreneurship and Relationship Management, University of Southern Denmark, Engstien 1, 6000 Kolding, Denmark ' Faculty of Entrepreneurship, University of Tehran, Farshi Moghaddam St., KargarShomali St., 1439813141, Tehran, Iran

Abstract: The proposition that a firm's networking provides social capital benefitting its innovation is commonly considered a universal in the sense that the effect is believed to be positive in every society and perhaps even equally strong. We hypothesise that benefit differs among societies, depending on a culture of trust, that benefit increases with trust. Our research design compares a high-trust society, Denmark and a low-trust society, Iran, with a sample of 646 firms. Hierarchical linear models corroborate our hypotheses. First, the level of innovation is higher in the high-trust society than in the low-trust society (also when controlling for characteristics of the firms and owner-managers). Second, networking promotes innovation in both countries (also when controlling for other conditions). Third, networking promotes innovation more in the high-trust society than in the low-trust society. This shows how firms' innovation is embedded in networking at micro-level and in culture at macro-level.

Keywords: collaborative networks; firm networking; collaboration; trust; innovation; hierarchical linear modelling; HLM; Global Entrepreneurship Monitor; GEM; social capital; entrepreneurial behaviour; entrepreneurs; Iran; Denmark; low-trust societies; high-trust societies; firm characteristics; owner-manager characteristics; low-trust cultures; high-trust cultures; culture; cultural differences.

DOI: 10.1504/IJESB.2014.065313

International Journal of Entrepreneurship and Small Business, 2014 Vol.23 No.1/2, pp.168 - 190

Published online: 21 Oct 2014 *

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