Shaping the path to inventive activity: the role of past experience in R&D alliances

Abstract

In this paper, we investigate a recurrent organizational event-R&D strategic alliances-and analyze its multidimensional effect on inventive activity; in particular, we examine the quality of the inventive process outcome. In so doing, we address the still-unresolved issue of the impact of past experience in explaining performance differences between firms in the realm of alliance inventiveness. Our results offer new insights concerning the crucial drivers of invention quality and technological breakthroughs. As expected, results suggest that-in the area of R&D-alliances formed by experienced partners are more likely to produce inventions that effectively synthesize technological knowledge from more diverse domains. In fact, experienced alliance partners are more likely to generate useful inventions with a greater innovative impact on others' subsequent inventions-knowledge that can be built upon. Surprisingly, results are indeterminate with regard to whether innovation via R&D alliance increases invention's degree of applicability across diverse scientific and technological fields that might cite its patent.

Existing Knowledge Assets and Disruptive Innovation: The Role of Knowledge Embeddedness and Specificity

“…In other words, knowledge specificity can help enterprises continue to gain competitive advantages in the main business and guide enterprises in devoting more resources to carrying out innovation activities related to the main businesses. Moreover, these innovative activities are bound to promote the application of core technologies in different industries, thus promoting outward-oriented disruptive innovation [53][54][55]. However, as the extent of knowledge specificity is higher, it may lead to the rigidification of core competencies in the main business, and ignore the disruptive innovation opportunities that erode the market share of the main businesses [56].…”

Strategic Alliances in Knowledge-Intensive Industries: An Integrated View

“…In sum, when an LPC faces significant barriers to internalization, it has to turn to NBFs to obtain key technologies in certain therapeutic or diagnostic areas (Di Guardo & Harrigan, 2016;Martins, 2016;and Martynov, 2017). Under these circumstances, however, transaction hazards may not only persist, but also worsen, because of NBFs' bargaining power due to their monopoly in biotechnology know-how.…”

“…This allows the LPCs not only to insure their investment but also to discover what opportunities they feel are worth pursuing. Mody (1993), Xu et al, (2014) and Di Guardo and Harrigan (2016) propose that alliances have the advantage of preserving flexibility in the face of uncertainty, while internalization requires substantial commitment and leads to a rigid structure. Internalization, moreover, is unlikely to occur when information and technological expertise have to be acquired from a variety of sources.…”

“…One of the reasons is that it is difficult and costly to change elements of a large, integrated system of co-specific resources and capabilities. Hence, internalization engenders "technological irreversibility" (Foray, 1991;Veltri et al, 2015;and Di Guardo & Harrigan, 2016). While associating co-specific resources within an organization in the process of technology creation is critical to avoiding hold up (Klein et al, 1978), internalization entails the risk of incurring irreversibility costs.…”

The Effect of Existing Knowledge Assets on Inbound/Outbound Disruptive Innovation

“…Major business specificity of knowledge assets could assist enterprises in continuously acquiring exclusive advantage on the major business and such unique advantage would guide enterprises investing in more resources and energy to develop innovation activities related to the major business. Furthermore, knowledge assets applicability is a critical factor in enterprises developing innovation management strategies [37,38]. Major business specificity of knowledge assets enhances the applicability to the major business [39,40] and further promotes enterprises developing innovation activities related to the major business.…”