Why aren't we learning from our partners? An investigation on the relationship between initial conditions and knowledge acquisition effectiveness

Although the theoretical literature has been favourable regarding the benefits of alliances, the empirical literature has been less clear. In part, we argue that this is because the literature generally ignores the initial organisational conditions of the firms before engaging in such activities. To address this issue, we designed a survey research to study the impact of initial product innovation conditions on the inter-firm networking patterns of entrepreneurial firms. We tested our hypotheses on small and medium biotechnology and IC design firms in the USA and Taiwan. The results suggest that inter-firm alliances serve as an effective platform of external knowledge acquisition when the knowledge recipients are strongly committed to the knowledge acquisition process. However, the efforts to acquire external knowledge are usually diluted as the size of the focal firm's inter-firm network increases. Such dilution effect reduces the effectiveness of external knowledge acquisition from external partners.