Breadth and Depth of Alliance Experience on Technological Innovativeness

Abstract

I examine impacts of alliance experience on partnering firms' innovative performance. Innovativeness indicates a firm's capabilities in creating competitive advantages. Using innovativeness as a novel measure of performance, I show empirical evidence that alliance experiences benefit partners through two paths: general partner experience (breadth) and duration of partnerships (depth). Breadth expands the pool of resource and knowledge in which a firm can access, thus increases the firm's exploration for innovative ideas. Duration of alliances determines the depth of knowledge developed in cooperative relationships. Such knowledge enables partners to transfer and to integrate resources with efficiency for innovative use. However, performance gains from duration diminish as relationships prolong.