Knowledge Dependence and the Formation of Director Interlocks

Abstract

In this study, we examine knowledge dependence, a unique form of external dependence firms face when they pursue new technologies. Our focus is on the formation of interorganizational ties as a means to manage the firm’s knowledge dependence. Studying the board interlock ties of 717 technology-based firms in 2002–2006, we find that tie formation is more likely when an external counterpart is more closely aligned with the global trajectory of the focal firm’s core technology and when the counterpart is more active in defending its intellectual property in this area. As a result of the interlock, the firm is more likely to gain access to the counterpart firm’s knowledge resources through research and development alliances and forestall litigation barriers in the use of core technologies. Our findings provide important theoretical implications for the unique role of knowledge resources in interorganizational dependence and tie formation.

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