The impact of small world on innovation: An empirical study of 16 countries

This paper investigates the impact of small world properties and the size of largest component on innovation performance at national level. Our study adds new evidence to the limited literature on this topic with an empirical investigation for the patent collaboration networks of 16 main innovative countries during 1975-2006. We combine small world network theory with statistical models to systematically explore the relationship between network structure and patent productivity. Results fail to support that the size of largest component enhances innovative productivity significantly, which is not consistent with recent concerns regarding positive effects of largest component on patent output. We do find that small-world structure benefits innovation but it is limited to a special range after which the effects inversed and shorter path length always correlates with increased innovation output. Our findings extend the current literature and they can be implicated for policy makers and relevant managers when making decisions for technology, industry and firm location. (C) 2009 Elsevier Ltd. All rights reserved.