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Knowledge Transfer in Buyer-Supplier Relationships – When It (Not) Occurs

  • Werner Bönte
  • Lars Wiethaus

Abuyer’s technical knowledge may increase the efficiency of its supplier.Suppliers, however, frequently maintain relationships with additional buyers. Knowledge disclosure then bears the risk of benefiting one’s own competitor due to opportunistic knowledge transmission through the common supplier. We show that in one-shot relationships no knowledge disclosure takes place because the supplier has an incentive for knowledge transmission and, in anticipation of this outcome, buyers refuse to disclose any of their knowledge. In repeated relationships knowledge disclosure is stabilized by larger technological proximity between buyers and suppliers and destabilized by the absolute value of the knowledge.

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Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung in its series RWI Discussion Papers with number 0034.

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Length: 28 pages
Date of creation: Nov 2005
Date of revision:
Handle: RePEc:rwi:dpaper:0034
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  1. Gamal Atallah, 2002. "Information Sharing and the Stability of Cooperation in Research Joint Ventures," Working Papers 0202EClassification-JEL: , University of Ottawa, Department of Economics.
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  15. Wiethaus, Lars, 2005. "Absorptive capacity and connectedness: Why competing firms also adopt identical R&D approaches," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 467-481, June.
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