Extant studies are inconclusive on the effects of network positions on innovation. We examine a contingency framework that positions knowledge diversity as moderating the relationship between network position and innovation. We draw our data from a sample of firms in the cultural and creative industries in Taiwan. Our results show that structural holes have a positive effect on exploitative and explorative innovation under a high degree of knowledge diversity. In addition, we find that knowledge diversity weakens the positive impact of network centrality on explorative innovation. More specifically, firms pursuing explorative innovation come from a position of network centrality but are dependent on the knowledge diversity in a network. Finally, our results show that while the relationship between network centrality and exploitative innovation is significantly positive under a low degree of knowledge diversity, this effect is no longer apparent under a high degree of knowledge diversity. This suggests that exploitative innovation is a more satisfactory approach when a firm is in a network characterized by low knowledge diversity.
