Enhancing innovation capacity through vertical, horizontal, and third-party networks for traditional foods.

ABSTRACT Across many sectors, the locus of innovation has shifted from the individual firm to networks of collaboration. Networking is one way for small‐ and medium‐sized enterprises (SMEs) in the food sector to cope with the many challenges they face with regards to innovation. In this article, we investigate the influence of different types of networking on the innovation capacity of chain networks in the traditional food sector. Our results highlight that networking among the vertical network members contributes most to the enhancement of the innovation capacity of all members. We also find that, horizontal or third‐party networking can enhance the innovation capacity of each member of a vertical network. Managerial implications include a prescription for network engagement through a set of joint activities and effort.

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