Different Missions and Commitment Power in R&D Organization: Theory and Evidence on Industry-University Alliances

Organization Science, Forthcoming

35 Pages Posted: 21 Jan 2008 Last revised: 2 Mar 2015

See all articles by Nicola Lacetera

Nicola Lacetera

University of Toronto - Strategic Management; University of Toronto at Mississauga - Department of Management; National Bureau of Economic Research (NBER)

Date Written: October 20, 2007

Abstract

This paper proposes a theory for why firms conduct some research activities in-house while outsourcing other projects to independent partners, and for why firms retain different degrees of control over collaborative research projects. The focus in on the determinants of a company`s choice to outsource research projects to academic organizations. Due to the different institutional mission of academic organizations, outsourcing a project to a university allows a firm to commit not to terminate or alter a scientifically valuable project before completion. This commitment is potentially valuable for the firm in an environment where scientific value and economic value may not coincide, and scientific workers are responsive to the incentives defined by their community of peers. An economic model that formalizes these arguments is developed. Empirical hypotheses are then formulated about the kind of research activities firms will outsource to universities, and activities on which they will exert stronger control. Evidence from a sample of industry-university research agreements, as well as from other large-sample and case studies, shows patterns consistent with the predictions of the model.

Keywords: R&D Organization, Firm Boundaries, Industry-University Relations

JEL Classification: D23, L22, L33, M55, O32

Suggested Citation

Lacetera, Nicola, Different Missions and Commitment Power in R&D Organization: Theory and Evidence on Industry-University Alliances (October 20, 2007). Organization Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1085924 or http://dx.doi.org/10.2139/ssrn.1085924

Nicola Lacetera (Contact Author)

University of Toronto - Strategic Management ( email )

Canada

University of Toronto at Mississauga - Department of Management

Canada

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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