Strategic Management Journal

Strat. Mgmt. J., 26: 287–295 (2005)

Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/smj.448

RESEARCH NOTES AND COMMENTARIES

CLUSTERS, NETWORKS, AND FIRM

INNOVATIVENESS
GEOFFREY G. BELL*
Labovitz School of Business and Economics, University of Minnesota Duluth Campus,
Duluth, Minnesota, U.S.A

This paper extends current knowledge of industry clusters by disentangling the effects of networks
from cluster (i.e., distinctly geographic) mechanisms on firm performance as well as by studying
the influence of these different mechanisms on firms located inside and outside the industry
cluster. It also highlights the importance of simultaneously modeling multiple networks which
may differentially influence important firm outcomes. In the paper, I model the innovativeness
of Canadian mutual fund companies as a function of their geographic location—inside or
outside the industry cluster of Toronto—and of their centrality in networks of managerial and
institutional ties. I find that locating in the industry cluster as well as centrality in the managerial
tie network enhances firm innovation, while centrality in the institutional tie network does not.
Copyright  2005 John Wiley & Sons, Ltd.

INTRODUCTION agglomeration economies (DeBresson and Amesse,

Industry clusters—groups of geographically proxi-
mate firms in the same industry—are a strik-
ing feature of the geography of economic activity
(Krugman, 1991) examined by industrial geog-
raphers at least since Marshall (1920). Strategy
scholars are now beginning to study how clusters
influence firm performance, and have yet to distin-
guish between benefits associated with enhanced
social interaction effects (Harrison, 1992) and
Keywords: innovation; networks; multiple networks;
industry clusters; mutual funds
∗
Correspondence to: Geoffrey G. Bell, Labovitz School of Busi-
ness and Economics, University of Minnesota Duluth Campus,
110 SBE, 412 Library Drive, Duluth, MN 55812, U.S.A.
E-mail: ggbell@d.umn.edu
1991; Harrison, 1992; Harrison, Kelley, and Gant,
1996; Pascal and McCall, 1980; Shaver and Flyer,
2000). Many existing studies model only firms
in the cluster, ignoring both ties between clus-
ter members and other (‘remote’) firms (Harrison,
1994, and Saxenian, 1994b, are notable excep-
tions) and the overall industry network struc-
ture (Storper and Harrison, 1991). This paper
overcomes some of these shortcomings by ask-
ing, ‘What is the relationship among industry
clusters, network centrality, and firm innovative-
ness?’ I examine these relationships by examin-
ing the influence of clusters and network struc-
ture on the innovativeness of Canadian mutual
fund companies. My study advances the strategy
literature by untangling cluster mechanisms from

Copyright  2005 John Wiley & Sons, Ltd. Received 22 November 1999
Final revision received 14 September 2004
288 G. G. Bell
network mechanisms and showing how they dif-
ferentially influence important firm outcomes. It
extends network theory by comparing partially
overlapping networks of managerial and institu-
tional ties and showing that centrality in differ-
ent networks distinctly influences innovativeness.
The paper proceeds as follows. The next section
of the paper develops theory and hypotheses. I
then outline my study setting and methodology,
and present results. Finally, I present conclusions,
limitations, and implications for scholars and man-
agers.
THEORY AND HYPOTHESES
A cluster is a group of firms from the same or
related industries located geographically near to
each other (Becattini, 1990; Brusco, 1990; Har-
rison et al., 1996; Storper and Harrison, 1991).
Scholars such as Harrison (1994) and Porter (1990)
predict that firms in the cluster should be more
innovative than others for at least two reasons.
First, firms in the cluster benefit from agglomer-
ation economies such as nearby suppliers attain-
ing efficient scale (Scott, 1992), direct observa-
tion of competitors (Burt, 1987; Harrison et al.,
1996), and ability to exploit collective knowledge
(Dosi, 1988; Marshall, 1920). Second, firms in
clusters benefit from network-based effects, espe-
cially enhanced social interaction (Harrison, 1992).
I begin my examination of these influences by
briefly defining key terms.
Key terms: Innovation and centrality
Innovation is the development and implementa-
tion of new ideas to solve problems (Dosi, 1988;
Van de Ven, 1986). According to Van de Ven,
‘An innovation is a new idea, which may be a
recombination of old ideas, a schema that chal-
lenges the present order, a formula, or a unique
approach which is perceived as new by the indi-
viduals involved’ (Van de Ven, 1986: 591). Inno-
vation includes a pattern of informal cooperative
R&D (von Hippel, 1987), resulting from infor-
mal information exchange among firms, so firms
better positioned to access information should be
more innovative (Rogers, 1995). Innovation also
countenances the possibility that an actor may try
to imitate others, but in the process inadvertently
generate new ideas (March, 1994). It entails the
Copyright  2005 John Wiley & Sons, Ltd.
development of new products or services as well
as new administrative systems (Damanpour, 1991;
Nohria and Gulati, 1996).
Centrality measures the involvement in the net-
work (Knoke and Burt, 1983): the extent to which
an actor is deeply involved in network relations
(Burt, 1980; Wasserman and Faust, 1994). It con-
siders access to and control over resources (Knoke
and Burt, 1983; Wasserman and Faust, 1994), and
thus is likely to be highly associated with inno-
vation, as access to and control over informa-
tion and resources are associated with innovation
(Becker, 1970; Powell, Koput, and Smith-Doerr,
1996; Rogers, 1995; von Hippel, 1988).
Clusters and firm innovativeness
Firms in clusters have better access to information
than do other firms (Bianchi and Bellini, 1991;
Porter, 1990; Pouder and St. John, 1996), resulting
from both direct cluster effects as well as network
processes underlying the cluster (Becattini, 1990;
Brusco, 1990; Harrison, 1994). Thus, the total
effect of clusters on innovation may be mostly
indirect, partially influenced by network position.
In this section, I focus on the direct effect of
clusters on innovation that operate independently
of network effects.
Such cluster effects will arise partially because
there is common knowledge available to members
of the cluster (Geroski, 1995) that is not con-
sciously transmitted among them (Marshall, 1920),
or is transmitted via chance meetings between
executives that are fostered by geographic prox-
imity (Saxenian, 1994b). Common knowledge is
augmented and reinforced by public information
sources, such as the local media or universi-
ties (Porter, 1998; Saxenian, 1994b). Over time,
the common knowledge forms a cluster level of
absorptive capacity (Cohen and Levinthal, 1990).
The ability to understand and exploit this cluster-
level absorptive capacity is enhanced by the com-
mon lineage and heritage of the firms in the cluster
and their executives. Specifically, firms in clusters
often share lineage to a common parent firm, such
as the many firms in Silicon Valley directly or indi-
rectly related to Fairchild (Saxenian, 1994a). More
broadly, executives in geographically proximate
firms share a common background and understand-
ing (Paniccia, 1998). This common lineage and
heritage will enable executives to understand infor-
mation they may share when they ‘run across each
Strat. Mgmt. J., 26: 287–295 (2005)

other’ in chance settings (Saxenian, 1994b). Also,
because information is sticky and place-specific
and the ability to transfer information decays with
distance (Ormrod, 1990; Saxenian, 1994a; von
Hippel, 1994), firms in the cluster will have bet-
ter access to common knowledge than geographi-
cally remote firms (‘remotes’). Thus, they tend to
search locally for information used in innovation
(Almeida and Kogut, 1997; Jaffe, Trajtenberg, and
Henderson, 1993).
Additionally, the geographic proximity of firms
in the cluster enhances direct observation of com-
petitors (Burt, 1987; Pascal and McCall, 1980;
Rogers, 1995). A firm that observes others may try
to mimic them and inadvertently generate innova-
tion (March, 1994). Such inadvertent innovation
may operate even in the absence of direct net-
work ties, when the imitator cannot simply contact
the other firm to learn more about an innovation,
but must rely on cues from observing the other,
increasing the likelihood of mutation and inno-
vation. Firms outside the cluster (remotes) would
have access to neither the cluster common knowl-
edge nor the ability to directly observe their rivals,
so would not be able to use these conduits for
innovation (Powell et al., 1996). Thus:
Hypothesis 1: In a given industry, after control-
ling for network effects, cluster-member firms
will be more innovative than remotes.
Modeling multiple networks
Scholars have long recognized that organizations
are embedded in multiple, only partially overlap-
ping, networks (Powell, 1985; Powell and Smith-
Doerr, 1994). Powell (1985) found no boundary
between the work and personal life of his subjects,
suggesting that modeling multiple networks is
needed to understand how different networks influ-
ence outcomes. Consequently, I model a manage-
rial network (the network of informal ties among
managers) and an institutional tie network (the net-
work of formal ties between their firms) to capture
both informal and formal ties.
Centrality and firm innovativeness
Central actors are extensively involved in their
networks (Burt, 1980; Freeman, 1979; Wasserman
and Faust, 1994), so have highlighted knowledge
Copyright  2005 John Wiley & Sons, Ltd.
Research Notes and Commentaries 289
of others’ innovative efforts (Becker, 1970). They
are less likely than others to miss valuable infor-
mation (Becker, 1970), and have quick access to
promising new ventures (Powell et al., 1996) that
may generate innovation.
Central firms may be better positioned to access
the veracity of the information they receive as
well as the information sources themselves (Burt,
1987). An information source may limit the infor-
mation it provides, either for strategic reasons (to
misrepresent the information) or to be ‘helpful’
(limiting information to what it believes the other
party needs). The more a firm is involved in its net-
work, the more it can compare information across
sources and assess its veracity. Moreover, firms
with multiple information sources are less likely
to miss vital information as multiple information
sources provide multiple channels to discover new
information, and can combine information in novel
ways to generate innovation (Van de Ven, 1986).
Firms and their executives are involved in two
distinct networks: a managerial network of infor-
mal ties among firm executives and an institutional
tie network of formal ties between firms. The man-
agerial network enhances information flow, espe-
cially the flow of tacit information among firms
(Uzzi, 1996). It provides relatively high-trust con-
text in which to communicate (Argyle and Hen-
derson, 1985). Being central in this network may
expose managers and their firms to a rich flow of
tacit knowledge useful for innovation. Conversely,
the institutional network provides opportunities to
hear industry news. For example, if a trade associ-
ation approves members’ new products, then serv-
ing on the association’s boards and committees
provides early warning about competitor actions.
Thus, centrality in each network should enhance
innovativeness:
Hypothesis 2: Centrality in the managerial net-
work enhances firm performance.
Hypothesis 3: Centrality in the institutional net-
work enhances firm performance.
METHODS
Research setting
I collected the data on and from mutual fund
companies listed in the January 1998 Member-
ship Directory of the Investment Funds Institute
Strat. Mgmt. J., 26: 287–295 (2005)
290 G. G. Bell
of Canada (Investment Funds Institute of Canada,
1998b). One of the 78 firms was listed twice in
the Directory, but included only once in the study.
Thus, my final sample consisted of 77 Invest-
ment Funds Institute of Canada (IFIC) members,
representing over 97 percent of assets under man-
agement in Canada (Investment Funds Institute of
Canada, 1997). Forty-six of the 77 IFIC mem-
ber firms maintain head offices in Toronto (10.6
firms per million people in the Toronto area); the
other 31 maintain head offices in 10 cities across
Canada, including nine in Vancouver (4.8 firms
per million people) and seven in Montreal (2.1
firms per million people). Given the high concen-
tration of mutual fund companies in Toronto, both
in absolute number and relative to underlying pop-
ulation base, Toronto dominates the geography of
this industry and firms in Toronto comprise the
industry cluster.
Data and measures
Mutual fund company innovativeness
I collected information on firm innovativeness
using a survey of industry experts: financial colum-
nists in Canada’s business press and executives
of mutual fund data services. I identified poten-
tial experts from lists of Southam News’ business
columnists (including the Financial Post), invest-
ment and mutual fund reporters for the Globe
and Mail, financial newsletter editors, and Cana-
dian mutual fund data sources. My initial sample
consisted of 23 persons, of whom 14 were gen-
eral business writers unable to provide the detailed
information I needed. The remaining nine persons
had primary or sole duty analyzing the Canadian
mutual fund industry. I received responses from
seven of the nine experts, six of whom provided
enough information to be usable. Five of the seven
respondents were located in Toronto, two outside.
Cronbach’s alpha score testing inter-rater reliabil-
ity across the six respondents was 0.80, indicating
broad consensus about firm innovativeness.
I measured innovativeness along three dimen-
sions by asking the industry experts to respond to
three statements about each fund company: ‘This
firm often leads the industry at (1) introducing
new products/. . . (2) introducing new services/. . .
(3) adopting new technologies.’ Respondents
scored their responses to each statement on a 5-
point scale ranging from 1 (strongly agree) to 5
Copyright  2005 John Wiley & Sons, Ltd.
(strongly disagree). Innovation is the summed and
averaged responses received from all respondents
for each firm. Cronbach’s alpha assessing the reli-
ability of the three indicators of Innovation was
0.93, indicating a high level of reliability among
the measures. Because Innovation was reverse
scored (i.e., high values of Innovation indicate a
lack of innovation), I reverse-coded the results as
Innovativeness.
Clusters
I coded the Cluster variable ‘1’ if a firm’s head
office is in the cluster (Toronto), and ‘0’ otherwise.
Data for this measure came from the Investment
Funds Institute of Canada (1998a), company data
(annual reports, etc.), BellCharts (1997), and Pape
(1997).
Managerial centrality
I collected data on the managerial tie network of
all 77 fund companies using a survey of executives
(fund managers and top management) administered
in February 1998. I developed the sample of fund
company executives by contacting each mutual
fund company and requesting a list of its execu-
tives, supplemented where necessary with alternate
sources such as the firm’s web site. I sampled one
to six executives from each firm. When the firm
employed six or fewer executives, I surveyed all
of them. When the firm employed more than six,
I selected six randomly. Six firms were exceptions
to this rule. Four cases consisted of two related
companies from which I selected more than six
respondents. In two cases, I sent more than six sur-
veys because a respondent specifically suggested
or requested that I send a survey to someone else
in the firm.
The procedures I followed closely parallel those
advocated by Dillman (1978). I sent a cover letter
and questionnaire to each executive in the sample
asking them to respond by a certain date. Approx-
imately 2 weeks later, I phoned the respondents
and asked for their assistance, and 1 week later
I sent non-respondents a second copy of the sur-
vey and an updated cover letter. I also called them
and asked them to watch for the survey and assist
me by completing it. Of the 305 surveys sent, 102
Strat. Mgmt. J., 26: 287–295 (2005)
 Research Notes and Commentaries 291

executives (33%) from 64 different firms (83%)
responded.1
In the survey, I asked questions about the exec-
utives’ friendships, information, and advice net-
works which I used to develop the managerial
tie network. For each of these variables, in cases
where more than one executive from a given firm
responded to the survey, I pooled their responses
such that I record a friendship, information, or
advice tie if any of the executives reported such
a tie. I mapped each of the friendship, informa-
tion, and advice networks in a 77 × 77 matrix.
I coded cell ij ‘1’ if any executive at firm i
was the recipient of a friendship, information,
or advice tie, respectively, and ‘0’ otherwise. To
assess agreement among the networks, I used the
‘simple matching’ QAP correlation routine (Bor-
gatti, Everett, and Freeman, 1999), which calcu-
lates the extent to which there is the same entry
in each cell in two matrices. The QAP correlation
scores ranged from 0.90 to 0.93. I created the Man-
agerial Centrality matrix by summing the three
matrices and dichotomizing the result to record
whether or not a tie existed from firm j to firm
i. I symmetrized the results because centrality
assesses involvement in the network (Knoke and
Burt, 1983). I then measured in-degree (Wasser-
man and Faust, 1994) as Managerial Centrality
for each firm by summing the columns to yield
the number of firms tied to i.
Institutional centrality
I created the Institutional Tie matrix using data
from the Investment Funds Institute of Canada
(1998a), which listed the 1997–98 IFIC Board of
1
To examine potential problems associated with having respon-
ses from only 64 of 77 firms, I reran all analyses using matrices
generated by data from the 64 responding firms. There were no
significant differences from the results reported herein.
Table 1. Means, standard deviations, and correlations
Directors, IFIC Management Committee, and IFIC
Retail Council. I created three measures of insti-
tutional ties: IFIC Board of Director Ties, IFIC
Management Committee Ties, and IFIC Retail
Council Ties. Because of the reciprocal nature of
these relationships, I measured these as symmetric
ties. I recorded each of these relations in separate
77 × 77 matrices, wherein cell ij was coded ‘1’ if
there was a tie between firms i and j , and ‘0’ other-
wise. There was high agreement among these net-
works, with QAP correlations ranging from 0.95
to 0.97. I summed the matrices into the Institu-
tional Tie matrix, whose cells are valued from
‘0’ (none of the three ties are present) to ‘3’ (all
three of the ties are present). As with the Manage-
rial Tie matrix, I created Institutional Centrality
by dichotomizing the Institutional Tie matrix and
summing the columns of the resultant matrix.
Control variables
Prior studies identified a significant positive rela-
tionship between firm size and innovativeness and
a significant negative relationship between firm
age and innovativeness. I control for these factors.
Market Share is the firm’s assets under manage-
ment as at December 31, 1997 divided by total
industry assets under management at that date.
Firm Age is 1998 less the earlier of either the date
of founding of the fund company or (in two cases
where that was unavailable) the date of inception
of the company’s oldest fund.
RESULTS
Variable correlations
Table 1 presents means, standard deviations, and
correlations among variables included in the anal-
ysis.

Variable Mean Standard deviation 1. 2. 3. 4. 5.

1. Innovativeness 2.70 1.01 –

2. Toronto 0.62 0.49 0.39∗∗∗ –
3. Managerial centrality 15.17 11.47 0.49∗∗∗ 0.26∗ —
4. Institutional centrality 4.60 7.44 0.43∗∗∗ 0.11 0.44∗∗∗ —
5. Market share 1.30 2.31 0.60∗∗∗ 0.20† 0.43∗∗∗ 0.61∗∗∗ —
6. Firm age 18.81 13.63 0.12 0.13 0.18 0.14 0.36∗∗∗

∗∗∗ ∗∗
p < 0.001; p < 0.01; ∗ p < 0.05; †p < 0.10

Copyright  2005 John Wiley & Sons, Ltd. Strat. Mgmt. J., 26: 287–295 (2005)
292 G. G. Bell
Table 2. Predictors of firm innovativeness
Variable Innovativeness
Toronto 0.50∗∗
Managerial centrality 0.02∗
Institutional centrality 0.00
Market share 0.21∗∗∗ (0.05)
Firm age −0.01
Adjusted R 2 0.47∗∗∗
∗∗∗
p < 0.005; ∗∗ p < 0.01; ∗ p < 0.05; †p < 0.10
Results for coefficients; standard errors in parentheses.
Hypotheses testing
I tested the hypotheses using a regression equation
model that modeled the influence of the cluster
variable, the network variables, and the controls
on firm innovativeness (see Table 2).
Factors influencing firm innovativeness
Hypothesis 1 (locating in the Cluster enhances
Innovativeness) is strongly supported (β = 0.50;
p < 0.01). Firms in the cluster are significantly
more innovative than remotes. Hypothesis 2
(Managerial Centrality enhances Innovativeness)
was also supported (β = 0.02; p < 0.05), while
Hypothesis 3 (Institutional Centrality enhances
Innovativeness) was not supported (β = 0.004;
n.s.). Market Share was positively significantly
associated with Innovativeness (β = 0.21; p <
0.001) and Firm Age was not significant (β =
−0.01; n.s.).
Moreover, the possibility exists that innovation
influences centrality as well as centrality influ-
encing innovation (the dimension of causality I
hypothesized here). I tested this by estimating the
model with a two-stage least-squares (2SLS) tech-
nique using instrumental variables for the two cen-
trality variables (results not reported). I applied
a Hausman test, which tests whether the coeffi-
cients under the 2SLS estimate (which are efficient
if innovation influences centrality) differs from
the OLS estimates (which are efficient if innova-
tion does not influence centrality). The Hausman
test could not reject the null hypothesis that the
two sets of estimates are the same (chi-square of
χ 2 (5) = 6.34, Prob > χ 2 = 0.2745), meaning that
we can rely on the OLS estimates.
Copyright  2005 John Wiley & Sons, Ltd.
DISCUSSION
Clusters, networks, and firm innovativeness
(0.19)
(0.01) This study set out to examine the relationship
(0.02)
among clusters, networks, and firm innovativeness,
(0.01) and proposed that clusters and network centrality
should enhance firm innovativeness. Indeed, locat-
ing in the cluster enhances firm innovativeness,
even after separately accounting for the influence
of network structure. Expanding on Marshall’s
notion that in clusters information is ‘in the air’
forming a common good available to all (Marshall,
1920), common knowledge may reflect chance
meetings that are likely to occur when executives
are geographically proximate (Saxenian, 1994b)
and when they share a common lineage (Saxenian,
1994a) and background (Paniccia, 1998). Alterna-
tively, the positive influence of clusters may reflect
ready access to geographically proximate support-
ing industries, such as commercial banks and the
Toronto Stock Exchange.
The study also shows the differential effects of
managerial and institutional ties on firm innova-
tiveness. As hypothesized, centrality in the man-
agerial tie network enhanced firm innovativeness,
suggesting that the informal friendship and com-
munication network provides an important source
of novel information useful in innovation (Uzzi,
1996). On the other hand, I found no significant
relation between institutional ties and innovative-
ness. Perhaps, in this industry at least, institutional
ties were used solely for the transmission of rela-
tively well-known information, and failed to gener-
ate communication that was enough, deep enough,
or novel enough (Uzzi, 1996) to enhance innova-
tion.
Limitations of the study
The study does not account for firm-specific fac-
tors influencing innovativeness, such as absorptive
capacity. Because the study focused on the role of
geographic clusters and networks, it did not mea-
sure absorptive capacity or similar firm-specific
factors that may influence firm ability to translate
information into innovation. On the other hand,
size and age may provide reasonable controls for
these differences.
Strat. Mgmt. J., 26: 287–295 (2005)

Implications for research
This study challenges both strategy and network
researchers. For strategy scholars, the study shows
the importance of distinguishing cluster and net-
work mechanisms. Simply aggregating cluster and
network mechanisms into ‘cluster effects’ (Bianchi
and Bellini, 1991) confounds benefits related to
clustering per se with benefits arising from net-
work ties. Thus, the study shows the importance of
examining cluster effects in greater detail, clearly
differentiating different mechanisms that drive per-
formance.
For network scholars, this study shows the
importance of clearly choosing the network(s)
modeled, and modeling multiple networks when
necessary (Baum and Dutton, 1996; Powell and
Smith-Doerr, 1994). Network scholars may choose
the networks they model on the basis of con-
venience. However, if, as in this study, differ-
ent networks distinctly influence important out-
comes, then modeling only a single network on the
basis of convenience risks attributing to one net-
work effects actually generated by another, produc-
ing a cross-level fallacy (Rousseau, 1985). Thus,
this study also amplifies the importance of study-
ing multiple networks simultaneously (Galask-
iewicz and Zaheer, 1999; Powell, 1985; Powell and
Smith-Doerr, 1994). While Powell (1985) found
that actors may use their networks for personal
use, I find the opposite also holds: managers may
use their personal networks for the benefit of their
firms. Although not tested in this study, it is quite
possible that different networks reflect different
causal mechanisms. (For example, Galaskiewicz
and Zaheer, 1999, assert that agents’ social net-
works are more likely to contain affective content
than are interorganizational networks.) Thus, net-
work scholars must seriously consider what mech-
anisms they expect to operate in the context they
are studying and choose networks that capture
those mechanisms.
Implications for managers
My study shows that, even accounting for net-
work ties, firms in clusters are more innovative
than are remotes. However, because the study did
not examine specific mechanisms underlying clus-
ter effects, we must be cautious in providing advice
to managers. However, managers can take away
several points. First, because cluster members are
Copyright  2005 John Wiley & Sons, Ltd.
Research Notes and Commentaries 293
more innovative than remotes, managers who are
concerned with innovation should consider locat-
ing some of their innovative-related operations to
the cluster. I do not suggest that moving to the
cluster will necessarily make a firm more innova-
tive; however, doing so will likely increase access
to firms that tend to be more innovative. Addi-
tionally, managers must recognize the importance
of network ties, especially their managerial net-
work ties, on the performance of their firms. While
managers have recently focused their attention on
structuring their firms’ network of formal ties, such
as strategic alliances (Doz and Hamel, 1998), this
study shows that managers need to manage their
informal networks carefully as well (Burt, 1992).
CONCLUSION
This paper responds to a call for researchers to
examine innovation in service industries, espe-
cially in financial services (Drazin and Schoonho-
ven, 1996). It ‘untangles’ cluster effects by sep-
arately modeling cluster-based mechanisms and
social interaction (network) mechanisms. In so
doing, it finds that both cluster and network mech-
anisms influence Canadian mutual fund company
innovativeness and that innovativeness, in turn,
enhances firm prestige.
ACKNOWLEDGEMENTS
I thank Milton Boyd, Phil Bromiley, Joe Galask-
iewicz, Aks Zaheer, the University of Minnesota
Strategy Research Group, and two anonymous
SMJ reviewers for their input into this project. I
also thank the University of Minnesota for provid-
ing financial assistance for this project.
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