With the sharp growth of R&D risk and cost, a single organization cannot control all the resources needed for innovation. The social network of different innovation subjects has become an important organizational form of technological innovation activities. Social network is not only a relationship structure through which enterprises access information, resources, and social support, but also a channel of emotional communication. According to social network theory, all enterprises are nested in the complex dynamic social network. The majority of them need to link with stakeholders such as suppliers, distributors as well as customers, using social network to exchange knowledge and share resources.

Previous research has extensively studied the role of social network in improving the innovation performance of enterprises. However, much work so far has focused on the direct impact of social network and innovation performance, little work has been devoted to the inherent influence mechanism. Moreover, few studies divide social network into internal and external social network to explore their interactive effect. Besides, in spite of some scholars have discussed the impact of knowledge management capability on innovation performance, they generally take knowledge management capability as a whole concept, little is known about the internal mechanism of knowledge management capability.

Therefore, based on social network and knowledge-based theories, the paper investigates the mechanism of enterprise social network and innovation performance, taking knowledge management capability as mediator and looking inside its black box. Besides, the approach of structural equation model analysis and bootstrap methods is used to test the relevant hypotheses.

Findings of the paper are summarized as follows: (1) the internal social network can improve innovation performance through the mediating role of internal knowledge management capacity, specifically, the internal social network has a positive impact on innovation performance via the chain mediating effects of knowledge creation, knowledge transformation and knowledge innovation capabilities; (2) the external social network of enterprise can improve innovation performance through the mediating role of external knowledge management capacity, specifically, the external social network has a positive impact on innovation performance via the chain mediating effects of knowledge absorption, knowledge connection and knowledge desorption capabilities; (3) the interaction between external social network and internal social network have a positive effect on innovation performance through the mediating role of internal and external knowledge management capacities.

Theoretically, several contributions of the current study are summarized as follows. First, this study divides social network into two dimensions, internal and external social network, explores their independent and interactive roles in influencing innovation performance, enriches the existing research on the application of social network in enterprise innovation. Secondly, knowledge management capability is introduced as a mediator to explore its role in the influence of social network on innovation performance, which some extent makes up for the deficiency of existing studies. Thirdly, the paper looks into the black box of knowledge management capability, dividing it into six dimensions: knowledge creation, knowledge transformation, knowledge innovation, knowledge absorption, knowledge connection and knowledge desorption capability, deeply investigate the internal mechanism of social network and innovation performance. This study complements the research of knowledge management capability, and supplements the impact of social network on innovation performance.