Effects of alliance portfolio breadth and depth on exploratory and exploitative innovation: Evidence from Indian high-tech sectors

Abstract

Firms increasingly pursue collaborative innovation using alliance portfolios (APs) to enhance innovation outcomes. AP breadth and depth are two important dimensions of collaborative innovation. AP breadth enhances a firm’s access to a variety of external knowledge whereas AP depth helps integration of external knowledge. This study examined how AP breadth and depth, separately and jointly, affect firm innovation. Drawing primarily on the organisational learning perspective, we suggested that AP breadth enhances a firm’s exploratory innovation but lowers its exploitative innovation. However, AP depth improves a firm’s exploitative innovation but diminishes its exploratory innovation. Further, we suggested that the interaction effect of AP breadth and depth is negative for exploratory innovation whereas it is positive for exploitative innovation. An empirical investigation conducted on a longitudinal dataset of Indian firms from high-tech sectors broadly supported our theoretical arguments.