IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v39y2010i2p229-238.html
   My bibliography  Save this article

A hidden cost of strategic alliances under Schumpeterian dynamics

Author

Listed:
  • Lee, Jeho
  • Park, Seung Ho
  • Ryu, Young
  • Baik, Yoon-Suk

Abstract

Recently, proponents of interfirm R&D collaboration have emphasized its benefits. We develop a dynamic model of Schumpeterian competition to examine whether such collaboration is indeed beneficial in the long run. We find that interfirm R&D collaboration is more likely to be a losing strategy when partners form alliances mainly to reduce R&D costs. On the other hand, partners collaborating to seek synergy by accessing each other's complementary assets/capabilities are more likely to be successful. Our study suggests that firms should not use strategic alliances merely to reduce R&D costs in a catch-up situation or to avoid head-on competition with rivals.

Suggested Citation

  • Lee, Jeho & Park, Seung Ho & Ryu, Young & Baik, Yoon-Suk, 2010. "A hidden cost of strategic alliances under Schumpeterian dynamics," Research Policy, Elsevier, vol. 39(2), pages 229-238, March.
  • Handle: RePEc:eee:respol:v:39:y:2010:i:2:p:229-238
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048-7333(09)00219-4
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
    2. Bayona, Cristina & Garcia-Marco, Teresa & Huerta, Emilio, 2001. "Firms' motivations for cooperative R&D: an empirical analysis of Spanish firms," Research Policy, Elsevier, vol. 30(8), pages 1289-1307, October.
    3. John Sutton, 1997. "Gibrat's Legacy," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 40-59, March.
    4. Masten, Scott E & Meehan, James W, Jr & Snyder, Edward A, 1991. "The Costs of Organization," Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(1), pages 1-25, Spring.
    5. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    6. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107 Elsevier.
    7. N. Venkatraman & Lawrence Loh & Jeongsuk Koh, 1994. "The Adoption of Corporate Governance Mechanisms: A Test of Competing Diffusion Models," Management Science, INFORMS, vol. 40(4), pages 496-507, April.
    8. Abreu, Dilip & Milgrom, Paul & Pearce, David, 1991. "Information and Timing in Repeated Partnerships," Econometrica, Econometric Society, vol. 59(6), pages 1713-1733, November.
    9. Jeho Lee, 2003. "Innovation and Strategic Divergence: An Empirical Study of the U.S. Pharmaceutical Industry from 1920 to 1960," Management Science, INFORMS, vol. 49(2), pages 143-159, February.
    10. Jongseok Lee & Jeho Lee & Habin Lee, 2003. "Exploration and Exploitation in the Presence of Network Externalities," Management Science, INFORMS, vol. 49(4), pages 553-570, April.
    11. Seung Ho Park & Michael V. Russo, 1996. "When Competition Eclipses Cooperation: An Event History Analysis of Joint Venture Failure," Management Science, INFORMS, vol. 42(6), pages 875-890, June.
    12. Bruce Kogut, 1991. "Joint Ventures and the Option to Expand and Acquire," Management Science, INFORMS, vol. 37(1), pages 19-33, January.
    13. Sidney G. Winter, 1971. "Satisficing, Selection, and the Innovating Remnant," The Quarterly Journal of Economics, Oxford University Press, vol. 85(2), pages 237-261.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ana-Maria Giurea, 2016. "Time planning and Cost Management in Strategic Alliances," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(59), pages 163-182, March.
    2. Jeho Lee & Jaeyong Song & Jae-Suk Yang, 2016. "Network structure effects on incumbency advantage," Strategic Management Journal, Wiley Blackwell, vol. 37(8), pages 1632-1648, August.
    3. Habib Affes & Fatma Ayadi, 2014. "The Impact of New Management Accounting Practices on Strategic Buyer–Supplier Relationship within the Supply Chain: An Empirical Analysis within the Tunisian Context," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 185-200, April.
    4. Habib Affes & Fatma Ayadi, 2014. "The Impact of Contextual Factors on Improving the Relational Intangible Capital Related to the Supply Chain: An Empirical Analysis within the Tunisian Context," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 201-217, April.
    5. Chia Sun, 2014. "A conceptual framework for R&D strategic alliance assessment for Taiwan’s biotechnology industry," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(1), pages 259-279, January.
    6. repec:enr:rpaper:0013 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:39:y:2010:i:2:p:229-238. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/respol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.