Monday, November 18, 2013

No Strings Attached: Examining the Relationship between Loosely Coupled Research Partnerships and Innovation

KLUETER Thomas, MONTEIRO L. Felipe, DUNLAP Denise R.
Read the working paper
INSEAD Working Paper 2013/117/STR/ACGRE revised version of 2013/50/ST/ACGRE

The purpose of this paper is to shed light on the relationship between loosely coupled research partnerships—formal interorganizational agreements through which the in-sourcing firm accesses and adds knowledge from an external partner in exchange for money (e.g. royalties)—and innovation. More broadly, it is one of the first to identify some of the firm-level conditions that compensate for the inherent limitations of this type of research partnership, challenging the implicit assumption that they cannot bring substantial innovation benefits (i.e., generate innovations which are new to the industry). In particular, we illustrate that when firms have an orientation to experiment with knowledge and have slack resources and organizational attention available then loosely coupled partnerships can lead to innovation previously attributed exclusively to tightly coupled partnerships.