Controlling contractual exchange risks in R&D interfirm cooperation: an empirical study

Abstract

Suppliers and buyers of R&D results perceive two exchange risks: first, the risk to achieve a lower profitability on the innovation return than the exchange partner, second, the risk of the partner becoming a competitor by unplanned, one-sided knowledge flows. Both risks motivate opportunistic behaviour. The paper deals with the reduction of the perceived supplier risks. We analyse how an option on later negotiation of an additional continuous innovation return sharing which is based on contractual hostages can lower the perceived exchange risks. An empirical study examines how effectively these hostages lower the perceived risks.