Innovation Networks and Knowledge Diffusion Across Industries: An Empirical Study from an Emerging Economy

Abstract

This study investigates the impact of innovation networks on knowledge diffusion, aligning with the Knowledge Spillover Theory of Entrepreneurship (KSTE). It explores how these networks promote sustainability-oriented innovation and enhance corporate performance across industries, focusing on the Ghanaian context. A theoretical framework was developed using a two-dimensional fixed effects model and instrumental variable estimations. The analysis utilized longitudinal data from the World Intellectual Property Organization (WIPO) via the PENTSCOPE database from 2000 to 2023. The study reveals that robust innovation networks significantly enhance knowledge diffusion. Absorptive capacity plays a crucial mediating role, enabling firms to assimilate and apply external knowledge effectively. Additionally, organizational culture is a critical moderator, with adaptive and collaborative cultures fostering more efficient knowledge integration. The results highlight the pivotal role of innovation networks in transforming technological advancements into measurable performance outcomes, driving sustainable innovation and competitive advantage. This research extends the KSTE framework by integrating the network theory to examine how firms exploit external knowledge. It provides empirical evidence from the Ghanaian context, offering novel insights into how innovation networks can foster knowledge diffusion and sustainable development. This study’s findings contribute to theoretical discourse and practical applications, emphasizing the importance of strategic engagement in innovation networks and adaptive organizational cultures for long-term success. This research provides insights applicable to other emerging economies, highlighting how robust innovation networks can drive knowledge diffusion and sustainable development beyond the Ghanaian context.