Abstract: Small-world networks have been widely recognized to promote creativity and improve performance theoretically. Yet empirical studies and evidence of their benefits remain scarce. We construct patent collaborate networks for nine innovative countries to find their small-world features. We use negative binomial models to study the impact of small-world on innovation output. The empirical results show that both short path length and higher small-world quotient correlate with increased innovation. Finally we discuss the implications of our findings for national and regional industry and innovation policies as well as corporations location.

Key words: small-world networks, innovation, patent