Inter-firm Cross Border Co-opetition: Evidence from a Two-Country Comparison

The theory and research existing on relationships between competitors concentrates on either competitive relationships or cooperative relationships and broadly argues that one relationship type harms or threatens the other. There has been little empirical research on firms simultaneously involved in and benefitting from cooperation and from competition even though such cases demonstrate both relationship types need simultaneously emphasising. This article aims to ascertain just how firms interrelate with their competitors in terms of the cooperative behaviours in effect when agreeing and implementing innovation based cooperation agreements as well as their respective influences on performance. The empirical data was obtained from a sample of Iberian border firms (Portugal and Spain) belonging to different sectors of activity. The results reflect significant differences in effect between firms from the two different countries as regards co-opetition and competition for innovation and the respective resulting performance levels. Portuguese firms display a positive relationship between the various types of innovation and the modes of cooperation with clients and competitors (co-opetition). In the case of Spanish firms, the effects of cooperation on innovation prove negative. Furthermore, in terms of financial performance, we find this is influenced neither by the means of cooperation nor by the means of innovation and in both countries.