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Inter-Firm Networks And Innovation: The Difference Between The Horizontal And Vertical Type, Yanli Zhang

Department of Management Faculty Scholarship and Creative Works

The literature has long recognized the important role that the closed kind of Japanese business group network has played in the innovative strengths of Japanese firms, yet at the same time the constraint that this type of network places upon the firms' technological connections to the rest of the world. In this article, this phenomenon is revisited taking into account the critical difference between two types of business group networks: the horizontal type and the vertical type. Using data on the US patents granted to the largest Japanese industrial firms, the results show that there are important differences between the …