HETEROGENEITY OF FIRM CAPABILITIES AND COOPERATIVE RESEARCH AND DEVELOPMENT: AN EMPIRICAL EXAMINATION OF MOTIVES

Abstract

This article proposes capability heterogeneity of R&D consortia participants as a condition to distinguish two competing motives for cooperative R&D: cost-sharing vs. skill-sharing. An analysis of 398 questionnaire responses from participants in Japanese government-sponsored R&D consortia finds that the relative importance of the cost-sharing motive in R&D consortia increases when participants’ capabilities are homogeneous or projects are large, while the relative importance of the skill-sharing motive in R&D consortia increases with heterogeneous capabilities. The skill-sharing motive is likely to increase a firm’s R&D spending, implying an additional consideration for management’s evaluation of cooperative R&D participation, as well as adding a new public policy implication of cooperative R&D. © 1997 by John Wiley & Sons, Ltd.