This paper takes a contextual approach to network dynamics and investigates how regional innovation networks evolve through exogenous crises. We studied how the 2007-08 Financial Crisis influenced the logic driving the formation of collaboration ties between inventors, and thus the regional network structure. Existing research on social capital has identified two perspectives on network formation: an instrumental approach and a community-oriented approach. Based on behavioral research, we propose that while facing a crisis, individuals shift their emphasis from advancing self-interests to pursuing the collective good of their community. Accordingly, we hypothesize that regional innovation networks become more connected and less hierarchical during downturns while less connected and more centralized during economic growth. We tested these hypotheses using data describing the evolution of the co-inventing networks of US Metropolitan Statistical Areas (MSA) between 2002 and 2014, before and after the 2007-8 Financial Crisis.
