How Active Collaboration Affects Innovation Adoption By Weaker And Stronger Firms

Existing research fails to explain why firms with weaker capabilities sometimes reach innovation adoption levels similar to those of their stronger competitors, even for competence enhancing innovations. Firms with weaker capabilities benefit more from collaboration owing to greater marginal benefit from using partners' resources and greater openness to learning from partners. This paper studies a complementary explanation that does not rely on bounded rationality, which is that stronger and weaker incumbents may realize differential benefits from actively collaborating with partners to introduce innovations.