UNU-MERIT Working Papers Series

Location and R&D alliances in the European ICT industry

Rajneesh Narula & Grazia D. Santangelo #2007-008

This paper shows empirically that in an intra-industry oligopolistic scenario the location of a firm's innovative activities plays an important role in determining its partner selection in R&D alliances. Such a role is mainly attributed to a strategic use of R&D alliances as a means to limit knowledge flows and protect competences, rather than to promote knowledge flows. By drawing on a novel dataset matching alliances and patent data for the European ICT industry, the econometric analysis shows that partners' prior co-location (at both national and sub-national regional level), previous ties and technological overlap matter in the choice of partner, while common nationality has a negative impact on alliance formation.

Keywords: Alliances, strategy, efficiency, R&D location. JEL: D23, F23, O18, O32, R3

UNU-MERIT Working Papers ISSN 1871-9872

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