Bridging the gap: citizenship diversity and global innovation networks in small and medium size companies

Recent literature stresses the increasing importance of global innovation networks (GINs) as a mechanism to organize innovation across geographical space. This paper investigates why and to what extent citizenship diversity of the firm's employees relates to the engagement of small and medium size companies in GINs. Citizenship diversity provides knowledge about the institutional context of other countries, increased capabilities to deal with institutional differences, larger social networks to build GINs and a broader search space. Further, the paper examines how the absorptive capacity of firms mediates the relationship between citizenship diversity and GINs. The empirical study is based on a linked employee-employer dataset with 6,771 observations of innovative small and medium size firms in Sweden. It provides strong evidence that the engagement in GINs is positively related to citizenship diversity, depending, however, on the absorptive capacity of firms.