Strategic groups emerged by selecting RD collaboration partners and firms' efficiency

Abstract

This paper highlights an effect of firms’ strategic mix in research and development (R&D) collaboration shown by their accumulated collaboration behaviours on efficiency, which has not received proper attention in the literature, which has focused on network effects – size, diversity – assuming homogeneity of partners. With a strategic perspective, we try to catch differences among partner portfolios at the level of collaboration types. We cluster firms into strategic groups by using the K-means clustering technique based on the firms’ R&D partner selection portfolios and estimate each group’s frontier function and meta-frontier function to measure each firm’s technical efficiency and technology gap ratio. We conduct multiple regressions to identify the factors affecting firms’ efficiency and found there can be a significant difference in firms’ efficiency given the same amount of input when firms have evolved toward different strategic groups determined by their accumulated R&D partner portfolios. The effects can also vary by firms’ R&D scales, sizes, and the industries to which they belong. The current study contributes to enriching the empirical bodies in the strategic group and innovation studies and by giving managerial implications to corporate leaders and policymakers for the smart strategic mix in selecting R&D collaboration partners.