Innovation beyond Firm Boundaries: Strategic Alliances and Corporate Innovation

58 Pages Posted: 1 Oct 2015 Last revised: 8 Jun 2023

See all articles by Thomas J. Chemmanur

Thomas J. Chemmanur

Boston College - Carroll School of Management

Yao Shen

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance

Jing Xie

University of Macau, Faculty of Business Administration, Department of Finance and Business Economics

Date Written: November 1, 2015

Abstract

In this paper, we empirically analyze how strategic alliances affect the innovation output of the firms forming the alliance. We find a positive effect of R&D-related strategic alliances on corporate innovation, as measured by the quantity and quality of patents filed. This effect is stronger for firms led by CEOs with higher general managerial skills, firms with greater experience from earlier alliances, and firms operating in R&D-intensive industries. Furthermore, the innovation-fostering effect of strategic alliances is more pronounced if alliance partnering firms share a common institutional blockholder or have a higher degree of technological proximity. We also document, for the first time in the literature, a unique contractual mechanism through which firms share the benefits of innovation with their alliance partners, namely, “co-patenting.”

Keywords: Corporate Innovation; Patents; Strategic Alliances; Co-patenting

JEL Classification: G34, G24

Suggested Citation

Chemmanur, Thomas J. and Shen, Yao and Xie, Jing, Innovation beyond Firm Boundaries: Strategic Alliances and Corporate Innovation (November 1, 2015). Journal of Corporate Finance, Vol. 60, 2023, Available at SSRN: https://ssrn.com/abstract=2668000 or http://dx.doi.org/10.2139/ssrn.2668000

Thomas J. Chemmanur (Contact Author)

Boston College - Carroll School of Management ( email )

Finance Department, 436 Fulton Hall
Carroll School of Management, Boston College
Chestnut Hill, MA 02467-3808
United States
617-552-3980 (Phone)
617-552-0431 (Fax)

HOME PAGE: http://https://www2.bc.edu/thomas-chemmanur/

Yao Shen

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance ( email )

55 Lexington Ave
New York, NY 10010
United States

Jing Xie

University of Macau, Faculty of Business Administration, Department of Finance and Business Economics ( email )

E22-4064, FBA building
Macau
Macau, 000000
China
+853 88224639 (Phone)

HOME PAGE: http://fba.um.edu.mo/faculty/jingxie/

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