The framing of knowledge transfers to shared R&D suppliers and its impact on innovation performance: a regulatory focus perspective

Abstract

When outsourcing research and development (R&D) services, fears of knowledge leakage can make client firms reluctant to transfer knowledge to their suppliers, even at the cost of reducing the performance of the agreement. Outsourcing to R&D suppliers shared with competitors ensures relying on refined capabilities due to the aggregation of the demands of related clients, but also aggravates this interorganizational learning dilemma. Taking a regulatory focus perspective, we argue that the client's commitment to the process of knowledge transfer with a shared supplier will depend on whether the relationship is framed with a promotion or a prevention focus. Using primary data at the transaction level from a survey conducted among 170 European and US technological firms, we find that sharing suppliers with competitors only boosts the client's innovative performance when outsourcing R&D services that do not require the transfer of tacit and firm‐specific knowledge. Otherwise, the appropriability hazards involved will make the firm frame the relationship with a prevention focus limiting the client's ability to achieve its innovation objectives.

What more can we learn from R&D alliances? A review and research agenda

“…Appropriability hazards imply the risk of inadequate uses or modifications of the knowledge transferred that may leave the transferor worse off. Such a risk occurs either when: (1) the recipient partner takes advantage of that acquired knowledge to become a future competitor (Alcácer and Oxley, 2014); or (2) the knowledge gained by the recipient partner may benefit competitors with whom they may also be engaged with (Martínez-Noya and García-Canal, 2015). Partners face a critical dilemma: how do they maintain the necessary degree of collaboration and knowledge exchange to achieve the alliance objectives, while avoiding the unintended leakage of valuable technology (Grimpe and Kaiser, 2010; Mudambi and Tallman, 2010; Oxley and Sampson, 2004; Zhang and Baden-Fuller, 2010)?…”

“…Therefore, when governing R&D alliances, it can be said that firms face the tension between knowledge sharing and knowledge expropriation (Heiman and Nickerson, 2004) because they need to maintain the necessary knowledge exchange to achieve their innovation objectives, while simultaneously being able to safeguard against the misappropriation of knowledge that these co-specialised investments make accessible (Grimpe and Kaiser, 2010; Oxley and Sampson, 2004; Ritala et al, 2015). How serious this threat is has been shown to be dependent on: (1) the extent to which the partner has access to complementary assets necessary to exploit that knowledge; and (2) the chances that the knowledge transferred within the alliance will leak to competitors through a common partner (Martínez-Noya and García-Canal, 2015, 2018). This fact could explain why within vertical R&D alliances some suppliers are willing to make unilateral commitments in the form of relationship-specific investments without economic safeguards (Kang et al, 2009).…”

“…Conceptually, they require a wide-ranging set of concepts from sociology, game theory, industrial organisation, economic geography and international business, to name a few. More recently attention has been drawn to contract design (Contractor and Reuer, 2014) or behavioural theories as a means to analyse how more microfoundational aspects influence R&D alliance decisions (Das and Kumar, 2011; Martínez-Noya and García-Canal, 2015). We believe that this will allow a better understanding of how managers’ perceptions or cognitive frameworks shape their alliance decisions in terms of their formation and development (Weber and Mayer, 2011).…”

Literature Review and Model Proposition: The Relationship Between Inter-Organisational Learning and Innovation

“…Trust between parties may lead to open innovation, thus joint platforms for knowledge sharing should be developed between long-term cooperations (e.g. Eiriz et al, 2017;Kim, 2006;Martinez-Noya & Garcia-Canal, 2016). On the other hand, in asymmetric dyadic inter-firm collaborations, the type and nature of power impacts the type of learning of the smaller organisation.…”

The moderating role of competence specialization in the effect of external R&D on innovative performance

“…Second, firms engaging in external R&D may suffer from outgoing (and hence, harmful) knowledge spillovers to R&D partners. For example, R&D outsourcing can involve potential knowledge leakages to R&D service providers, especially when they also have contracts with competitors (Martínez‐Noya and García‐Canal, ). Furthermore, in collaborative R&D, it is often difficult to decide the allocation of rights on the produced knowledge.…”