Article2012

Value Cocreation and Wealth Spillover in Open Innovation Alliances1

Han · Oh · Im . · Ray M. Chang · Alain Pinsonneault

178 citations0/0 files storedMIS Quarterly

No readable copy stored yet — this record is metadata only.

Innovation and Knowledge Management Business Strategy and Innovation Digital Platforms and Economics

Abstract

In this study, we investigate the economic and strategic value of open innovation alliances (OIAs), in which collaborators and competitors integrate in the pursuit of the codevelopment of technological innovations. Given that OIAs differ substantially from traditional, closed alliances in many aspects, including their strategic scope and scale, governing mechanisms, and member composition, it is important to understand and assess the potential value inherent in these new modes of collaboration. Furthermore, OIAs evolve over time as the participating members are free to enter and leave at will. Therefore, we also examine the on-going value creation and wealth spillover that result from changes in membership. Moreover, we investigate how a firm’s participation in an IT-based open alliance alters the market value of its rivals operating within the same marketplace. To gain additional insight into the factors that moderate the market valuation of OIA participation, several contextual factors, including the degree of partner heterogeneity, innovation type, and degree of openness of the OIAs are used to account for variability in abnormal returns. Based on 194 observations, we found that allying firms realize significant positive abnormal returns when their entry into an OIA is made public. The results also suggest that substantial excessive returns accrue to the allying firms with the belated entry of a market leader firm. Furthermore, we discovered that a firm’s entry into an OIA increases, rather than decreases, the market valuation of its rivals. Interestingly, an incumbent rival that did not participate in the alliance appears to gain greater “free-riding” benefits from the OIA, as compared to peer rivals. Innovation type and openness were significantly associated with the amount of abnormal returns accruing to allying firms, while no significance was found for partner heterogeneity. Finally, we conclude with a discussion of the implications of our findings for research and practice with respect to value cocreation in multifirm environments.

Citations in this library

Stored only when both papers are in the corpus — 178 citations exist upstream.

References

1977The Measurement of Observer Agreement for Categorical Data 1991Firm Resources and Sustained Competitive Advantage 1960A Coefficient of Agreement for Nominal Scales 1990Absorptive Capacity: A New Perspective on Learning and Innovation 1991Exploration and Exploitation in Organizational Learning 1979Transaction-Cost Economics: The Governance of Contractual Relations 1991Development of an Instrument to Measure the Perceptions of Adopting an Information Technology Innovation 1996Interorganizational Collaboration and the Locus of Innovation: Networks of Learning in Biotechnology

Cited by

2018“All for One and One for All?” - Knowledge broker roles in managing tensions of internal coopetition: The Ubisoft case 2018The openness of open innovation in ecosystems – Integrating innovation and management literature on knowledge linkages 2015The Organizational Innovation System: A systemic framework for radical innovation at the organizational level 2019Selecting an open innovation community as an alliance partner: Looking for healthy communities and ecosystems 2017A longitudinal cross-sector analysis of open data portal service capability: The case of Australian local governments

Imported from OpenAlex (CC0) — nothing here is generated.