This paper clarifies how a firm's entrepreneurial orientation (EO) affects joint product innovation within a vertical alliance and how this is influenced by increasing technological uncertainty and the absorption of knowledge from the alliance partners. The results of a structural equation model with latent interactions on 171 firms in the manufacturing industry indicate that the focal firm's EO increases joint innovation, although this positive effect declines when a high level of uncertainty increases. On the other hand, the ability to absorb partners' knowledge increases joint product innovation. As such, this study's results contribute to research in the field of vertical alliances, EO, and the theoretical foundation of a dynamic capability perspective.

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