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Determinants of alliance portfolio complexity and its effect on innovative performance of companies

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  • Duysters, Geert

    (UNU-MERIT)

  • Lokshin, Boris

    (UNU-MERIT)

Abstract

Alliance formation is often described as a mechanism used by firms to increase voluntary knowledge transfers. Access to external knowledge has been increasingly recognized as a main source of a firm's innovativeness. In this paper we examine decisions to form alliance portfolios of foreign and domestic partners by three groups of firms: innovators (firms that are successful in introducing new products to the market), imitators (firms that are successful at introducing new products, which are not new to the market) and product non-innovators. We consider an alliance portfolio that includes different partnership types (competitor, customer, supplier, university/research center). We develop a measure of portfolio complexity which we define as the number and diversity of elements of the alliance portfolio with which a firm must interact. We then estimate models that explain portfolio complexity and its impact on firm's innovative performance. Using panel data on more than 1800 firms in the Netherlands we find that foremost innovators have a strong propensity to form portfolios consisting of international alliances. Being an innovator or imitator also increases the propensity to form a portfolio of domestic alliances, relative to non-innovators; but this propensity is not stronger for innovators. Innovators appear to derive benefit from both intensive (exploitative) and broad (explorative) use of external information sources. The former sourcing is more important for innovators, while the latter for imitators. Finally, alliance complexity is found to have an inverse U-shape relationship to innovative performance.

Suggested Citation

  • Duysters, Geert & Lokshin, Boris, 2007. "Determinants of alliance portfolio complexity and its effect on innovative performance of companies," MERIT Working Papers 2007-033, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2007033
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    Cited by:

    1. Spyros Arvanitis, 2009. "How do different motives for R&D cooperation affect firm performance?," KOF Working papers 09-233, KOF Swiss Economic Institute, ETH Zurich.
    2. Belderbos, Rene & Gilsing, Victor & Jacob, Jojo, 2011. "Technology alliances in emerging economies: Persistence and interrelation in European firms' alliance formation," MERIT Working Papers 2011-026, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Lokshin, Boris & Hagedoorn, John & Letterie, Wilko, 2011. "The bumpy road of technology partnerships: Understanding causes and consequences of partnership mal-functioning," Research Policy, Elsevier, vol. 40(2), pages 297-308, March.
    4. Duysters, Geert & Saebi, Tina & Dong, Qinqin, 2007. "Strategic Partnering with Chinese Companies: Hidden Motives and Treasures," MERIT Working Papers 2007-034, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Abiodun A. Egbetokun, 2012. "Cooperation behaviour and innovation performance in the Nigerian manufacturing industry," Jena Economics Research Papers 2012-037, Friedrich-Schiller-University Jena.
    6. Mireia Fernández-Ardevol & Josep Lladós Masllorens, 2011. "Determinants of Science-Based Cooperation: Evidence in a Sample of Small and Micro Firms," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 9(4 (Winter), pages 319-333.
    7. Fernández-Esquinas, Manuel & Pinto, Hugo & Yruela, Manuel Pérez & Pereira, Tiago Santos, 2016. "Tracing the flows of knowledge transfer: Latent dimensions and determinants of university–industry interactions in peripheral innovation systems," Technological Forecasting and Social Change, Elsevier, vol. 113(PB), pages 266-279.
    8. Karbowski, Adam, 2016. "Współpraca badawczo-rozwojowa przedsiębiorstw: przegląd prac empirycznych [R&D Cooperation of Firms: Empirical literature review]," MPRA Paper 77698, University Library of Munich, Germany.
    9. Luca Pennacchio & Giuseppe Piroli & Otello Ardovino, 2018. "The Role of R&D Cooperation in Firm Innovation," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 15(01), pages 1-27, February.

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    More about this item

    Keywords

    Innovation; R&D cooperation; Alliance portfolio;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • P13 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Cooperative Enterprises
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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