The Effects of Coopetition and Coopetition Capability on Firm Innovation Performance

Abstract

This dissertation is motivated by two research questions: 1) to what extent does coopetition impact firm innovation performance? and 2) to what extent does a firmâ s coopetition capability influence the relationship between coopetition and firm innovation performance? Despite the popularity of coopetition in both the academic and business arenas, empirical studies on the effects of coopetition on firm innovation performance are rare. With the dynamic and paradoxical nature of coopetition, the role of a firmâ s specific capability to manage coopetition (i.e., coopetition capability) is an important issue that has remained under-researched in the literature. In an endeavor to contribute to the coopetition literature in the context of technological innovation, both theoretical and methodological improvements were pursued for this dissertation. From a theoretical perspective, I conceptualize coopetition as composed of three components: 1) competition between partners, 2) cooperation between partners, and 3) the interplay between competition and cooperation. It is argued that the balance between competition and cooperation is essential to generate greater innovation performance in the paradoxical relationship. Further, I newly conceptualize coopetition-based innovation that is composed of three components: 1) joint innovation, 2) innovation through knowledge application, and 3) innovation in the partnerâ s domains. Methodologically, I measure coopetition as a continuous variable. Using both a longitudinal research design in the semiconductor industry and an exemplar case study of coopetition, I examine the effects of coopetition and coopetition capability on coopetition-based innovation. To represent coopetition, I employed four combinations with two types of competition (technology competition and market competition) and two types of cooperation (type strength of a focal alliance and tie strength between partners). The empirical evidence indicates that the balance between competition and cooperation at both the dyadic and portfolio levels increases the potential of firms to generate greater innovation performance from coopetition. This study demonstrates that firms with coopetition capabilities can manage coopetition and create greater common value with a partner and appropriate more value from the dynamic and paradoxical relationship. The research findings also have important managerial implications.