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On the management of open innovation

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  • Gambardella, Alfonso
  • Panico, Claudio

Abstract

In an open innovation relationship, the party that owns a key asset enjoys bargaining power that discourages the investments of the other party in the collaboration. We show that these incentives can be restored by conferring on the weak party the power to take decisions during the research process – e.g., a pharmaceutical firm with manufacturing and commercialization assets offers the direction of a joint research project to a biotech partner. However, on many occasions, the strong party still captures more value from the collaboration by retaining the power to take decisions during research even if it produces less innovation value and fewer aggregate profits. We conclude that the potential of open innovation is underexploited. In particular, owners may not release enough power to take decisions on the use of their assets.

Suggested Citation

  • Gambardella, Alfonso & Panico, Claudio, 2014. "On the management of open innovation," Research Policy, Elsevier, vol. 43(5), pages 903-913.
  • Handle: RePEc:eee:respol:v:43:y:2014:i:5:p:903-913
    DOI: 10.1016/j.respol.2013.12.002
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    Cited by:

    1. repec:gam:jsusta:v:8:y:2016:i:2:p:146:d:63413 is not listed on IDEAS
    2. Sul Kassicieh, 2016. "Technology Entrepreneurship: Progress of a Clinical Approach Through Time," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 7(1), pages 1-22, March.
    3. Byungun Yoon & Juneseuk Shin & Sungjoo Lee, 2016. "Open Innovation Projects in SMEs as an Engine for Sustainable Growth," Sustainability, MDPI, Open Access Journal, vol. 8(2), pages 1-27, February.
    4. Lo Nigro, Giovanna, 2016. "The effect of early or late R&D inbound alliance on innovation," Journal of Business Research, Elsevier, vol. 69(5), pages 1791-1795.
    5. repec:eee:tefoso:v:132:y:2018:i:c:p:284-298 is not listed on IDEAS
    6. Chen, Hsing Hung & Chen, Silu & Lan, Yong, 2016. "Attaining a sustainable competitive advantage in the smart grid industry of China using suitable open innovation intermediaries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 1083-1091.
    7. Wield, David & Tait, Joyce & Chataway, Joanna & Mittra, James & Mastroeni, Michele, 2017. "Conceptualising and practising multiple knowledge interactions in the life sciences," Technological Forecasting and Social Change, Elsevier, vol. 116(C), pages 308-315.
    8. repec:wsi:ijimxx:v:21:y:2017:i:03:n:s1363919617500256 is not listed on IDEAS
    9. repec:bla:stratm:v:38:y:2017:i:8:p:1646-1667 is not listed on IDEAS

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