Research on the efficiency of modular organizations based on knowledge spillovers effect

Knowledge spillover is an exchange of ideas among individuals. In knowledge management economics, a knowledge spillover is a non-rival knowledge market externality that has a spillover effect of stimulating technological improvements in a neighbor through one´s own innovation. This paper researches the efficiency of the modular organization from the perspective of knowledge spillovers. First of all, a production function model is proposed, which is build on the effect of knowledge spillovers among members of the modular organization. Additionally, some relevant factors are found that the efficiency of the modular organization is influenced by analyzing this model. Finally, this paper concluded that the efficiency of the modular organization and the knowledge spillovers among members of the organization which impacts each other, and two suggestions are proposed in the light of the conclusion.