Inter-Firm Collaboration and Innovation Performance for New-to-Market Products: The Moderating Role of Technological and Skills-Related Knowledge Assets

Abstract

This study examines the impact that the two types of knowledge assets — technological knowledge and skills-related knowledge — have on the link between inter-firm collaboration (IFC) and product innovation performance, measured by the sales share of new-to-market products. Drawing on transaction cost economics (TCE), we propose that the relation specificity of these knowledge assets that a firm shares with its partners (reflecting its level of research and development (R&D) and training investments, respectively) is a key determinant of the benefits and transaction costs associated with IFC. Using a two-wave panel of 480 innovating firms in the Australian state of Tasmania, we find that the observed positive association between IFC and the sales share of new-to-market products declines at high levels of R&D and training intensities. Our findings help strengthen an understanding of the role of transaction costs for relation-specific knowledge assets and the factors that could influence the value of IFC as a pathway to enhanced innovation performance for new-to-market products.