As in the typical chicken-or-egg causality dilemma, it is challenging to disentangle whether the innovation implementation behaviors of an organization are a precursor to or a consequence of its relationship networks. Drawing on a longitudinal data set of digitalization practices in the project-based construction industry and the advances in network-behaviors dynamics modeling, we investigate how inter-organizational collaborative networks and organizational innovation implementation behaviors of project-based firms (PBFs) coevolve over time through the interplay of social selection and influence processes. The findings provide clear evidence that the dynamics of project-based collaborative networks is shaped by and, in turn, shapes the dynamics of innovation implementation behaviors of PBFs. The results show that compared with those sharing similar innovation implementation behaviors with clients, PBFs with higher levels of innovation implementation behaviors are more likely to be selected as project partners. With regard to the social influence process, the results show that compared with the impacts of their institutional equivalent peers, PBFs tend to be more substantially impacted by the behaviors of their project-based cohesive partners. The results further show that such impacts are more substantially based on the imitate-the-average effect as compared with the imitate-the-best effect. As an exploratory effort of developing a coevolution perspective to systematically investigate the coevolution of inter-organizational networks and organizational behaviors, this study provides a systematic and nuanced understanding of how heterogenous PBFs concretely interact with each other through temporary projects and how such interactions contingently facilitate or inhibit the inter-organizational diffusion of innovative practices. The findings contribute to the literature on partner selection, innovation diffusion, as well as organizational evolution and provide important managerial implications for managers and policymakers.
