The Dynamics of the Inventor Network in German Biotechnology: Geographical Proximity versus Triadic Closure

Economic geography has developed a stronghold analysing how geography impacts innovation. Yet, despite increased interest in networks, a critical assessment of the role of geography in the evolution of networks is still lacking. This paper juxtaposes geographical proximity with the network of prior ties as alternative mechanisms for tie formation. Analysing the evolution of inventor networks in German biotechnology, the paper theoretically argues and empirically demonstrates that - as the technological regime of an industry changes over time - inventors increasingly rely on network resources by forming links to partners of partners, whilst the direct impact of geographical proximity on tie formation decreases.