Collaborations and Innovation in Partitioned Industries: An Analysis of U.S. Feature Film Coproductions

In partitioned industries, a small number of generalist organizations occupy the center of the market, whereas a much larger number of specialists populate the periphery. The role of collaborations within and across the center-periphery boundary in these industries has been underexplored. We propose that hybrid collaborations between organizations in the center and periphery—combining the broad resource base of generalists with the focused knowledge of specialists—encourage product innovation and result in enhanced organizational adaptation for both populations. We test these ideas in the U.S. motion picture industry, where film production companies face significant unpredictability of success and fluctuating audience tastes. We find that generalist and specialist production companies that partner to produce films introduce more creative content in their films compared with those that collaborate in the same population or produce alone. Generalist film companies benefit further from these collaborations through increased competitive differentiation of their films from other generalists in subsequent productions, whereas specialists experience lower exit rates. These findings suggest that interorganizational collaborations between generalists and specialists provide effective adaptive strategies to compete in markets with uncertain demand and shifting audience preferences. These strategies can sustain, rather than weaken, industry partitioning.