The Scope and Governance of International R&D Alliances

45 Pages Posted: 26 May 2003

See all articles by Joanne E. Oxley

Joanne E. Oxley

University of Toronto - Joseph L. Rotman School of Management

Rachelle C. Sampson

University of Maryland - Robert H. Smith School of Business; Georgetown University - Robert Emmett McDonough School of Business

Date Written: June 2003

Abstract

Participants in research and development alliances face a difficult challenge: How to maintain sufficiently open knowledge exchange to achieve alliance objectives while controlling knowledge flows to avoid unintended leakage of valuable technology. Prior research suggests that choosing an appropriate organizational form or governance structure is an important mechanism in achieving a balance between these potentially competing concerns. This does not exhaust the set of possible mechanisms available to alliance partners, however. In this paper we explore an alternative response to hazards of R&D cooperation: reduction of the "scope" of the alliance. We argue that when partner firms are direct competitors in end product or strategic resource markets even "protective" governance structures such as equity joint ventures may provide insufficient protection to induce extensive knowledge sharing among alliance participants. Rather than abandoning potential gains from cooperation altogether in these circumstances, partners choose to limit the scope of alliance activities to those that can be successfully completed with limited (and carefully regulated) knowledge sharing. Our arguments are supported by empirical analysis of a sample of international R&D alliances involving electronics and telecommunications equipment companies.

Keywords: alliances, R&D, governance, scope

JEL Classification: L22, O32

Suggested Citation

Oxley, Joanne E. and Sampson, Rachelle C., The Scope and Governance of International R&D Alliances (June 2003). Available at SSRN: https://ssrn.com/abstract=398320 or http://dx.doi.org/10.2139/ssrn.398320

Joanne E. Oxley

University of Toronto - Joseph L. Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416-978-0305 (Phone)

Rachelle C. Sampson (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

Van Munching Hall
University of Maryland
College Park, MD 20742-1815
United States
(301) 405-7658 (Phone)

HOME PAGE: http://www.linkedin.com/in/rachelle-sampson-68a3b610/

Georgetown University - Robert Emmett McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

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