How does contract completeness affect tacit knowledge acquisition?

Abstract

Purpose This study aims to empirically investigate the role of contracts in tacit knowledge acquisition in research and development (R&D) alliances. By combining the perspectives of sensemaking and transaction cost economics (TCE), this study proposes a model about the mechanisms through which shared goals and contract completeness jointly affect tacit knowledge acquisition. Design/methodology/approach This study adopted a quantitative design and used the questionnaire survey method to collect data. The authors finally collected data on 196 R&D alliance samples in China. Multiple regression analysis was used to test the hypotheses. Findings There is strong empirical support that contract completeness has a positive effect on shared goals and that shared goals have a positive effect on tacit knowledge acquisition. Meanwhile, contract completeness weakens the positive effect of shared goals on tacit knowledge acquisition. Therefore, this study reveals that contract completeness has an inverted U-shaped effect on tacit knowledge acquisition. Practical implications The findings suggest that managers should consider both the psychological and rational effects of contract governance simultaneously, thus recognizing the importance of a moderate level of contract completeness for tacit knowledge acquisition in R&D alliances. Originality/value This study enhances the current understanding of contract governance by integrating the sensemaking and TCE perspectives. The findings provide a possible explanation of how contracts affect tacit knowledge acquisition in R&D alliances. The authors expand the research on contract governance and alliance knowledge acquisition by revealing the inverted U-shaped relationship between contract governance and tacit knowledge acquisition.