Network Heterogeneity and Firm Performance: the Role of Network Capability

Innovation networks refer to a set of firms and other institutions that work together for a common goal, which is to develop innovation. The importance of these networks in technological fields such as biopharmaceuticals is significant. Accordingly, the purpose of this study is to investigate the role of network capabilities of biopharmaceutical firms in their performance in heterogeneous networks in which they operate. For this purpose, while identifying the main dimensions and components, to answer the research questions, two models were developed. To test the research hypotheses, questionnaires from several biopharmaceutical firms in Iran were analyzed by structural equation modeling. Our results show that network heterogeneity relates to the higher performance of firms in the network, and this relationship is affected by the network capabilities of firms. Also, findings show the moderating and mediating role of network capabilities in the relationship between network heterogeneity and firm performance was confirmed. Finally, the role of networking capabilities, which is mostly related to the main firms (hubs) in this regard, is more prominent.