Empirical evidence regarding the tension between knowledge sharing and knowledge expropriation in collaborations

Interfirm collaborations can raise a fundamental dilemma. To create value, collaborators may have to adopt a variety of practices to facilitate knowledge transfer. Deploying these practices may increase the likelihood that economically valuable knowledge, which is (1) beyond the scope of the collaboration, and (2) difficult to legally protect, is expropriated. How can firms manage this dilemma? The purpose of this paper is to empirically examine the veracity of a chain of propositions addressing this dilemma based on a novel joint knowledge-based view|transaction cost economics framework. A plausible chain of relationships is briefly summarized and explored in detail empirically using unrelated datasets. The chain links two knowledge-based attributes of collaboration-knowledge tacitness and problem-solving complexity-to the use of knowledge management practices-high-bandwidth communication channels and co-specialized communication codes. These practices are economic responses to knowledge-sharing difficulties as measured by tacitness and complexity. Increasing knowledge transparency via knowledge management practices, however, gives rise to opportunism hazards, which are safeguarded against via economizing governance choice. Our empirical effort examines the effects that two knowledge attributes of collaborations have on governance choice, first directly and then indirectly through the intervening linkages. Empirical results from both datasets indicate substantial support for the proposed chain of relationships. The results are provocative in that they offer the first preliminary evidence for a plausible reconciliation of two perspectives previously treated exclusively as adversaries. Copyright © 2004 John Wiley & Sons, Ltd.