An Evolutionary Analysis of Relational Governance in an Innovation Ecosystem

Abstract

Despite considerable research highlighting the significance of relational governance in inter-organizational relationships, few have involved the connections between relational governance and innovation ecosystems. This study explores this issue to discover the influential mechanisms of relational governance in innovation ecosystem co-evolution. Building an evolutionary game model, we embody trust and reciprocity (two dominance of relational governance) into co-evolutionary relationships of an innovation ecosystem composed of focal firms, research institutes, customers, and governments, and discuss how relational governance affects innovation strategies of actors. Moreover, the impacts of benefit distribution are also examined. We reveal that (1) focal firms and governments prefer cooperative strategies; (2) reciprocity and trust foster cooperation; increasing benefit distribution drives all actors to collaborate except research institutes; (3) governments finitely encourage cooperation through regulation; and (4) the power of relational governance is restricted due to the below-the-average strategies of customers and research institutes and the neutralizing effects of benefits. Our findings offer a complementary and novel framework for relational governance and extend a deeper understanding of innovation ecosystem studies.