Researching Collaborative Advantage: Some Conceptual and Multi-Level Issues

SMG Working Paper No. 6/2010

35 Pages Posted: 25 Aug 2010

See all articles by Nicolai J. Foss

Nicolai J. Foss

Copenhagen Business School - Department of Strategy and Innovation

Bo Bernhard Nielsen

Copenhagen Business School - Department of Strategic Management and Globalization

Date Written: August 1, 2010


As the editors of this volume note in their introductory chapter, collaboration is inherent in any operating market economy, and collaboration is, of course, sought because of the advantages it yields relative to non-collaboration. At the most abstract level, “collaboration” simply means “non-autarcic”; thus, Austrian economist Ludwig von Mises (1936) saw the division of labor as organized under capitalist institutions as a primary example of peaceful collaboration. Less abstractly, collaborative advantage may be related to notions of social capital and generalized trust. Still, such understandings capture a very large part of extant social science research. A more narrow understanding of collaborative advantage is required, lest we merely engage in an unproductive relabeling game. In fact, starting with important contributions by, for example, Hirschman (1970) and Richardson (1972), modern writers associate collaborative advantage with (typically) long-lasting and stable relations between actors, supported by informal trust relations, relations based on formal contracts or property rights, or some combination thereof (Lazzarini, Miller & Zenger, 2004). The relevant actors may exist at different analytical levels (e.g., individuals, firms, dyads, industries, clusters, regions, nations) and may in turn be embedded in various formal and informal institutions (North, 1990), as well as in certain geographical contexts.

However, even this conceptual narrowing of the notion of collaborative advantage still implies that we are making reference to very large and still expanding literatures in (fields in) economics (e.g., economic geography, urban economics, trade theory) and sociology, as well as management fields, such as strategic management, international business, and innovation studies. In various field and discipline-specific ways, these examine the morphology of collaboration and collaborative advantage, and seek to identify their antecedents and consequences. Methods differ, ranging from longitudinal single case studies to multi-level panel data studies using state of the art econometrics. Not surprisingly, it is far from clear that what is effectively a jumble of contributions actually adds up to robust generalizations and insights. Parts of extant work on collaboration and collaborative advantage is nicely summarized in the editors’ introductory chapter.

In this chapter we argue that because there are so few obvious constraints on the meaning of collaboration on the social domain, and because it is mixed up with fundamental multi-level issues, both with respect to conceptualization, antecedents and consequences, clarity and rigor with respect to construct definition, location of constructs at various analytical levels, and methods is absolutely essential. For example, while collaborative advantage may be well-defined at the level of firm dyads (Richardson, 1972; Williamson, 1985; Dyer & Wilkins, 1993), it may be (in fact, is) less well defined at higher levels of analysis, such as industries or industrial districts. Or, collaborative advantage at these latter levels may actually mean something different from collaborative advantage at the dyadic level, and have different antecedents and consequences. For example, as the notion of collaborative advantage traverses levels of analysis, antecedents likely differ (Nielsen, 2010).

As these examples suggest, many of the difficulties of researching collaboration and collaborative advantage stem from the multi-level nature of these constructs themselves, as well as from the fact that their antecedents and consequences may be located at multiple different levels. For instance, with respect to antecedents, dyad-level collaborative advantage (e.g., superior innovation resulting from pooling innovation capabilities in specific projects) may arise from particularly skilled R&D personnel or alliance managers; the firms’ endowments of innovation capabilities or their experiences from previous R&D collaboration; advantages accruing to the specific region they are located in; governmental support programs; broad societal institutions; etc. Thus, collaborative advantage may have antecedents on lower (”micro”) as well as higher (”macro”) analytical levels (Knudsen & Nielsen, 2010). In fact, one of our key points in the following is that researching collaborative advantage inherently requires a multi-level approach. Theoretically, account must be made of antecedents and consequences at different levels, as well as potential cross-level effects. In extant research, this is often not done; for example, research on national systems of innovation (e.g., Lundvall, 1992) often makes no reference to firms whatsoever (which logically must be part of the micro-foundations of such systems). By the same token, little effort has been devoted to defining the level at which constructs operate and little theory development within the strategic alliance field explicitly addresses the role played by variables at different levels (Nielsen, 2010). Proper — multilevel — empirical research methods must be adopted; otherwise, relevant causes are not identified and/or estimated parameters become biased.

Accordingly, this chapter offers a condensed primer on multi-level conceptual and methodological issues pertaining to collaborative advantage in order to guide future research. Rather than striving to be all-encompassing, we focus our discussion on a particular type of collaboration—strategic alliances among independent business firms—as this area of research continues to play a central role in strategic management, international business and organizational science. Despite this focus, most of the ensuing discussion applies equally well to other kinds of collaborations and we draw parallels to these where relevant. A further limitation is that we restrict our inquiry to variable-centered theoretical and empirical inquiry, and as such do not touch upon collaborative advantage in the context of small-N research, such as narrative approaches or approaches relying on comparative case method.

Suggested Citation

Foss, Nicolai J. and Nielsen, Bo Bernhard, Researching Collaborative Advantage: Some Conceptual and Multi-Level Issues (August 1, 2010). SMG Working Paper No. 6/2010, Available at SSRN: or

Nicolai J. Foss (Contact Author)

Copenhagen Business School - Department of Strategy and Innovation ( email )

Frederiksberg, 2000

Bo Bernhard Nielsen

Copenhagen Business School - Department of Strategic Management and Globalization ( email )

Porcelænshaven 24
Frederiksberg, 2000
+45 3815 3030 (Phone)
+45 2815 3035 (Fax)

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