Template-type: ReDIF-Paper 1.0
Author-Name: Duysters, Geert
Author-Email: duysters@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Author-Name: Lokshin, Boris
Author-Email: lokshin@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Title: Determinants of alliance portfolio complexity and its effect on innovative 
	 performance of companies
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.      
Classification-JEL: O31, D74, P13, O32
Keywords: Innovation, R&D cooperation, Alliance portfolio
Series: UNU-MERIT Working Papers
Creation-Date: 2007
Number: 033
File-URL: http://www.merit.unu.edu/publications/wppdf/2007/wp2007-033.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2007033