Reconciling the Dilemma of Knowledge Sharing: A Network Pluralism Framework of Firms’ R&D Alliance Network and Innovation Performance

Abstract

This study highlights a theoretical dilemma about the mixed implications of a firm’s R&D alliance network for its innovation performance. That is, knowledge sharing among R&D alliance partners can both benefit the focal firm with access to external knowledge and skill sets and expose it to potential risks of knowledge leakage and misappropriation, thus both advancing and hampering the focal firm’s innovation performance. Drawing on the network pluralism perspective, we address this dilemma by highlighting the interplay between the network embeddedness forces exerted by a firm’s R&D alliance network and other networks the focal firm participates in. Specifically, we find that a strong industrial network built upon the coalition and associations among peer firms in the focal firm’s industry can intensify the nonmonotonic (inverted U-shaped) effect of an R&D alliance network on the firm’s innovation performance, while the firm’s strong political connections with governments can weaken the effect of an R&D alliance network. In addition, such interplay between different networks tends to be strengthened by the focal firm’s technological capability.