The evolution of innovation networks: the case of a publicly funded German automotive network

In this paper we analyze the evolution of a publicly funded interfirm R&D network in the German automotive industry between 1998 and 2007. A stochastic actor-based model allows us to estimate the role of various drivers of the evolutionary change process. We test hypotheses derived in an innovation and evolutionary economics framework and show that structural positions of firms as well as actor covariates and dyadic covariates are influential determinants of network evolution. Our results indicate that knowledge-related effects such as absorptive capacity, technological distance and knowledge-base modularity are significant determinants of network evolution. Moreover, transitivity is found to be a relevant endogenous structural effect. Also, firms with an experience in cooperation tend to be engaged more intensive in cooperation both as initiators and as targets. The same holds for geographically neighboring firms.