Internationalization of R&D Through Alliances or Joint Ventures?

Abstract

How do firms select different forms of partnerships, i.e., non- equity-based alliances or equity-based joint ventures (JVs), in the process of internationalization of research and development (R&D)? We argue that the interplay of information processing and interorganizational learning perspectives can help better understand this decision making. The information processing perspective emphasizes information load as a mechanism of selecting different types of global R&D partnership, suggesting that a firm with high information load, as indicated by its partnership diversification, may choose R&D alliances to avoid the problem of information overload. In contrast, the interorganizational learning perspective highlights knowledge transfer as a mechanism, indicating the disadvantage of alliances in the global R&D partnership choice. Furthermore, we argue technological distance and repeated partnership are boundary conditions under which the effect of partnership diversification on the likelihood of selecting alliances is promoted or prohibited. Using a sample of cross-border R&D alliances and joint ventures in a multiple-country setting, we find supportive evidence of our theoretical predictions. This study contributes to the literature on the R&D internationalization.