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Universities and public research organizations (PROs) are valuable sources of knowledge on innovation development for firms. Differences in goals and approaches between firms and PROs often create tension and lead to challenges that prevent achieving fruitful collaboration. This paper explores how the development of cognitive and relational social capital can mitigate such challenges and encourage fruitful collaboration between firms and PROs in research alliances over time and further lead to the development of innovations. By comparing three firms participating in a well-established research alliance with three firms participating in an emerging one, the development of both cognitive and relational social capital at the individual, organizational and alliance level is shown to be crucial for effective collaboration in research alliances over time. Common goals and understandings regarding the collaboration and the creation of personal relationships between the employees of firms and PROs contribute to mitigating collaborative challenges, to cohesion and to the achievement of goals to create innovation. Moreover, the presence of at least one of the dimensions of social capital appears to be necessary when entering a research alliance for the first time because cognitive and relational social capital are found to be mutually reinforced over time.

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