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Keywords

board external connection; start-ups; knowledge spillover; technological innovation

Abstract

Board external connections serve as a vital conduit for start-ups to harness knowledge spillovers and empower their innovation endeavors. Drawing upon the entrepreneurial knowledge spillover theory, this study delves into the impact of external board connections on innovation within innovative start-ups in China, utilizing a sample of 225 such enterprises and employing the probit regression model. The findings underscore not only the significant influence of board external connections on innovation in these start-ups but also their pivotal role in facilitating knowledge spillovers that drive innovation. Further exploration reveals a nuanced dynamic: these connections not only enable start-ups to tap into the ‘one-way spillover’ of knowledge from incumbent firms but also facilitate the ‘backflow’ of knowledge generated by startups themselves into those established companies, fostering a mutually beneficial ‘two-way reciprocal’ relationship. This dual flow of knowledge enriches the innovation ecosystem and underscores the interconnectedness of firms across different stages of development. Moreover, the study highlights the heterogeneous effects of board external connections on start-ups with varying levels of absorptive capacity. Specifically, it observes that the stronger a startup’s absorptive capacity, the more pronounced is the boost provided by board external connections to its innovation capabilities. This underscores the importance of not just establishing connections but also nurturing a culture and infrastructure within startups that enable effective knowledge acquisition, assimilation, and utilization. By contributing to the depth and breadth of entrepreneurial knowledge spillover theory, this research offers valuable insights into the mechanisms through which board external connections act as a conduit for knowledge sharing and exchange. It underscores the strategic importance of leveraging these connections to bridge the knowledge gap between startups and more established firms, fostering a symbiotic relationship that benefits both parties. From a practical perspective, the findings suggest that policymakers and entrepreneurs alike should prioritize fostering an environment conducive to the development and maintenance of board external connections. This includes initiatives aimed at enhancing the networking capabilities of start-ups, facilitating knowledge exchange platforms, and promoting collaboration between startups and established firms. By doing so, not only can startups harness valuable knowledge resources to fuel their innovation engines, but the overall ecosystem can benefit from a more vibrant and interconnected knowledge flow. In summary, this study underscores the transformative potential of board external connections in driving innovation within innovative startups. By illuminating the intricate interplay between knowledge spillovers, absorptive capacity, and board connections, it offers a nuanced understanding of the complex dynamics that shape the innovation landscape and contributes significantly to the ongoing discourse on entrepreneurship and knowledge management.

DOI

10.16315/j.stm.2024.04.005

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