Choosing the Best Partner for Product Innovation

Abstract

:Innovation strategies are increasingly inter-organizational, and yet firms may find it difficult to choose the appropriate type of cooperation: with competitors (coopetition) or with non-competitors (suppliers, customers, universities, etc.). Coopetition is frequently considered to be a riskier venture, which may lead to the conclusion that this strategy is not the most appropriate for increasing a firm’s innovation. The literature on the topic is inconclusive so we try to clarify this issue by introducing a new dimension to the nexus of inter-organizational cooperation and innovation, namely, the geographical location of the cooperation partner. We analyze cooperation strategies with different types of partners and we test our hypotheses on 3,933 firms sampled from the French CIS 04 database. We find that the choice of cooperation strategy depends on the type of cooperation partner (non-rival or competitor), on the type of innovation (radical or incremental); and on the geographical location of the competitor.