The interaction mode and geographic scope of firms’ technology alliances: implications of balancing exploration and exploitation in R&D

This paper proposes that the interaction mode, i.e. interactive and iterative, and geographic scope, i.e. domestic and international, of technology alliances generate sources of exploration and exploitation for firms. An implication of this idea is that firms can use these sources for balancing its internal focus on exploratory and exploitative research and development activities (R&D). Then, the paper suggests that the use of this balancing strategy has positive effects on a firm’s innovative performance. Using panel data based on Spanish manufacturing companies for the period 2004–2012, the empirical results confirm that firms balancing their internal exploration or exploitation in R&D with sources of external exploitation or exploration in their technology alliances are the firms with better prospects to produce innovation streams. Implications for the literature on complementarities in innovation, ambidexterity and R&D alliance formation are derived from the analysis.