The strategic allocation of inventors to R&D collaborations

Research Summary In this paper, we suggest that staffing decisions in R&D alliances can reduce the inherent tension between value creation and value protection faced by participating firms. By considering R&D workers a primary source of knowledge leakage, we analyze the role of their intellectual property (IP) protection in shaping the misappropriation threat posed by the partner. We rely on patent ownership and inventorship data to analyze the selection of individuals for R&D collaborations in the pharmaceutical industry between 1991 and 2010. Our results suggest that an inventor's strength of IP protection is an important determinant in allocation decisions since it contributes to offsetting leakage risks in the alliance. The effect is especially strong in alliances that anticipate higher hazards. Managerial Summary The literature argues that firms can reap many benefits from R&D collaborations. However, such activities are challenging to manage because they require firms to put valuable knowledge at risk of misappropriation by the partner. We draw attention to the role that inventors play in generating and channeling knowledge during collaborative work and posit that the strength of the IP protection covering their innovations can safeguard against the consequences of knowledge leakage. We analyze pharmaceutical alliances and find that managers are more prone to allocate to collaborations inventors whose knowledge is better protected, particularly when the alliance anticipates considerable misappropriation risks. Our study has implications for how firms allocate inventors across projects, which may be an important factor for the overall success of firms' R&D strategies.