Partner technological

heterogeneity and innovation

performance of R&D alliances
Si Zhang1 , Jizhen Li2,* and Na Li3,*
1
 School of Economics and Management, University of Chinese Academy of Sciences, 219 Building 7,
80 Zhongguancun East Road, Beijing, 100190, China. zhangsi@ucas.ac.cn
2
 Research Center for Competitive Dynamics and Innovation Strategy, School of Economics and
Management, Tsinghua University, 541 Weilun Building, Beijing, 100084, China. lijzh@sem.tsinghua.edu.cn
3
 Ping An Technology (Shenzhen) Co., Ltd, Ping An International Finance Centre, No.3, South Xinyuan
Road, Beijing, China. lina420@pingan.com.cn

This study investigates the impacts of partner technology heterogeneity on innovation perfor-
mance of alliance firms both in terms of R&D output and the enhancement of partners’ inno-
vation capability. We apply a generalized semi-­parametric model on a questionnaire survey
result of 413 High and New Technology Enterprises in China. In order to ensure the robust-
ness and practicability of our result, PCA is applied to extract comprehensive information and
SiZer analysis is employed to test the linearity and significance of the nonparametric functions
in the model. Our results indicate that collaborations between partners with different indus-
try technologies exert inversed U-­shaped R&D output pattern and affect very little the innova-
tion ability of focal firms. The impact of industry domain divergence is no longer significant
when partner technology heterogeneity is added in the model of analysis. Partner technology
heterogeneity leads to an ascending S-­shaped R&D output pattern and contributes positively
to innovation capabilities. One of the implications of our findings is that when choosing R&D
alliance partners, firms are better off avoiding candidates from a different industry domain
but opt for potential collaborators who are in the same industry but in the different technical
domain, which may facilitate more effective organizational learning. Further, we argue that
the reasons behind the S-­shaped R&D output pattern led by technology heterogeneity being
the co-­existence of competition and cooperation between partners where firms collaborate in
value-­creation by combining diverse resources and compete for acquiring partner’s distinct
technology and resources. Therefore, we suggest that, for the sustainability of collaborative
innovation outcome, both cooperation and competition amongst alliance partners should be
encouraged and well balanced at different stages of joint R&D projects.

1. Introduction tend to explore alternative competitive sources

beyond company boundaries when their in-­house

A s competition is intensified by the pace of

technology development nowadays, firms
R&D can no longer cope with the growing need
of users in a timely and cost-­
effective way. To

This paper is supported by the Fundamental Research Funds for the Central Universities (No. Y95402R), China Ministry of Science
and Technology (No. 2017ZG-­002).

© 2021 RADMA and John Wiley & Sons Ltd 1

Si Zhang, Jizhen Li and Na Li
promote innovation, firms must step outside their
familiar technological domains and explore di-
vergent technical sources (Kelley et al., 2011).
Inter-­organizational alliances of R&D create paths
through which firms may gain external knowledge
(resources) (Barney, 1991) and technological com-
petencies while sharing the costs and risks associ-
ated with the product development process amongst
their partners (Powell, 1990). R&D collaborations
facilitate the sharing of technological information
among partners (Yang et al., 2011) and strengthen
learning and knowledge integration abilities (Doz,
1996; Chen, 2010) especially when partners are
coming from different technical domains. Since
heterogeneity of alliance partners may cause sig-
nificant variance in alliance performance, it attracts
attention both from the industry and the academia
(e.g. Hambrick et al., 1996; Haunschild, 2002;
Goerzen and Beamish, 2005; Jiang et al., 2010).
Extracting from the notion of knowledge het-
erogeneity, which is referred to as ‘the variety of
knowledge, know-­how, and expertise to which a
manager has access through her network’ (Rodan
and Galunic, 2004, p. 545), the present study
emphasizes technology heterogeneity. We inves-
tigate the influences of the idiosyncratic patterns
of the technological resources and competences of
alliance partners on innovation. Although a few ear-
lier studies contribute to the understanding of how
technology heterogeneity may affect innovation,
they offer seemingly contradictory conclusions
(Haans, 2019). On the one hand, alliance partner
technological heterogeneity may provide wider
knowledge resources by allowing firms to access
a larger variety of new technology in a timely
and cost-­efficient manner than relying solely on
in-­house R&D. Thus, partnering firms are able to
recombine existing knowledge into new innovation
(Fleming, 2001). Access to diversified knowledge
is an important condition for exploratory innova-
tion (Greve, 2009). In a different or novel knowl-
edge domain, new insights and solution are likely
to be found (Simonton, 1999). Solutions from one
domain may be applied in another (Hargadon and
Sutton, 1997) leading to innovation in other indus-
tries. In these cases, technological heterogeneity
associates with better innovation performance.
However, on the other hand, it is argued that
the difference among partners might create a gap
between them that hinders knowledge exchange
(Grant, 1997) by making knowledge assimilation
harder while the difficulty and cost of managing
collaborated projects increase as technological
complexity grows (Oxley, 1996). According to
absorptive capacity theory, firms can only assimilate
2  R&D Management 2021
external knowledge that is closely related to their
prior knowledge (Cohen and Levinthal, 1989) so
that partner technological similarity could have
a positive effect on alliance R&D performance.
Thus, Sampson (2007) summarizes while diversity
in technology capabilities of partnering firms does
encourage knowledge recombination, it makes
knowledge transfer harder. For that, researchers
propose that innovation is promoted when there
is a moderate level of diversity between partner-
ing firms (Phelps, 2010). However, Jennings et al.
(2009) and Cennamo and Santalo (2013) argue that,
instead of inversed U-­shaped pattern, distinctive-
ness may have a U-­shaped impact on performance.
Recent work by Haans (2019) further suggests
U-­shaped and inverted U-­shaped may both appear
which is contingent on how different their peers
are. The contradictory conclusion is not only an
academic puzzle but in practice confuse managers
when they make strategic decisions on choosing
alliance partners. Therefore, a more comprehensive
analysis should be carried out in searching for an
“optimal” distinctiveness (Zhao et al., 2017). We
are motivated by the conflicting findings and hoping
to extend the optimal distinctiveness (Deephouse,
1999; Navis and Glynn, 2011; Zhao et al., 2017)
in the technology-­heterogeneity-­specific category
and provide practicable suggestions to firms. For
this account, questions to be probed in this study
include: (a) What are the main effects of alliance
technological heterogeneity on firm’s innovation
performance? (b) How innovation performance is
influenced by the degree or classes of heterogene-
ity, based on which we investigate, (c) what is the
optimal technological distinctiveness? By seeking
answers to these questions, we will be able to pro-
vide implications for firms in their joining in and
forming strategic technological alliances.
As extant researches have fairly good compre-
hension of the rationales for forming alliance and
less attention is given to the choice of partners
(Rothaermel and Boeker, 2010), our work aims to pro-
vide managerial implication to firms in their choice
of alliance partners either in the same industry or else
in conjunction with considerations of the project life-
cycle. We investigate ‘who allies with whom’ ques-
tion (Oliver, 1991) plus ‘when to’. For this purpose,
instead of patent and citation data as primally cho-
sen by most extant research, we employ a question-
naire survey result that includes both subjective and
objective data and information. A generalized semi-­
parametric model is applied to the survey result con-
taining 413 High and New Technology Enterprises
in China to examine the causal relationship between
technological heterogeneity between dyadic alliance
© 2021 RADMA and John Wiley & Sons Ltd
 Partner technological heterogeneity and innovation performance of R&D alliances
partners and the R&D output and innovation capabil-
ity of focal firms. In order to ensure the robustness
and practicability of our survey-­based results, PCA
is applied to extract comprehensive information and
SiZer analysis is employed to test the linearity and
significance of the nonparametric functions in the
model. The analysis results indicate that, when select-
ing technological alliance partners, transdisciplinary
collaboration should take extra caution as joining up
with partnering firms from a different industry tech-
nology field may yield undesirable R&D outcome.
On the other hand, forming R&D alliances with part-
ners having different R&D technology could exert
ascending S-­shaped innovation output pattern and
enhance innovation capabilities. The analysis based
on the results provides a more dynamic conclusion
in relation to the roles of technological heterogene-
ity in alliance R&D performance as well as practical
suggestions that can be helpful in guiding firms in
strategic decision making regarding the selection and
management of alliance partners.
2. Theoretical background
An R&D alliance is a cooperative technological
arrangement between two or more enterprises aim-
ing to improve their R&D performances through the
sharing of technology-­based resource and joint inno-
vation activities (Das and Teng, 2000; Hagedoorn,
2002; Jarillo, 1988), which is also referred to stra-
tegic technology partnership, technological alli-
ances or technological cooperative agreements
(Narula and Martinez-­Noya, 2015). Alliances with
external partners that are technologically compe-
tent is an efficient means to acquire and utilize new
technologies (Ahuja and Lampert, 2001) so that
inter-­
organizational collaboration spurs innovation
(Hagedoorn and Duysters, 2002; Lee et al., 2001).
The outcome of such a cooperative relationship can
yield supernormal profits for all partners and boost
technological development through proactive or sub-
conscious learning (Dyer and Singh, 1998; Hu et.al,
2015). Based on absorptive capacity theory (Cohen
and Levinthal, 1989), the benefits of similarity in
technology between partners are captured by many
researches which consent in their conclusions that
the greater the similarity between partner firms’
knowledge bases the larger the benefits resulted from
the collaborations (e.g. Mowery et al., 1996; Lane
and Lubatkin, 1998; Ahuja and Katila, 2001). Having
similar knowledge bases especially at the initial stage
of collaboration facilitates the knowledge transfer
process and builds a good foundation for external
knowledge to be combined with existing technology.
© 2021 RADMA and John Wiley & Sons Ltd
Therefore, it is argued that heterogeneity of knowl-
edge inventories of collaborators will cut down the
possibilities to learn from partners (Hamel, 1991;
Fleming and Sorenson, 2001) since the discrepancy
in technology profiles of partners weakens the ability
to recognize and absorb external knowledge. Grant
(1997), from a resource-­based view, proposes that
integrating existing knowledge that the members of
alliances already have is more efficient than access-
ing and integrating external sources. Thus, firms
tend to seek and try to exhaust their knowledge pool
before having to reach out for a distant knowledge
source outside firm boundary or outside an enclosed
circle of partnering firms that they attach to.
However, another stream of studies concludes oth-
erwise. As early as Barney (1991), researchers have
noticed that resource complementarity is identified as
one of the premises for competitive advantages of alli-
ance firms, which acknowledges that partner resources
including technology could be or better be diversified.
Afterwards, a number of alliance studies empirically
supported this view (e.g. Harrigan, 1985; Lorange
and Roos, 1992; Burgers et al., 1993). By combining
diverse technological resources and excavating the
complementarities of partnering companies, sustained
innovativeness may result (Lin, 2014). Differentiation
or in some cases complementarities in knowledge
available to alliance partners draw alliance tighter
together (Chung et al., 2000), as the complementar-
ity of resources contributes to knowledge transfer
and hence enhances joint innovation outcomes. The
variety of partners and their knowledge bases connect
positively to collaborative outcomes by inspiring one
another during joint R&D activities. Krammer (2016)
advocates that the level of technological diversifica-
tion has significant positive effects on firms’ propen-
sity and positive correlations for both exploitative and
explorative innovation. Additionally, Alliance brings
new external knowledge of various partners into the
firm knowledge base with risk and uncertainty under
control (Wassmer, 2010). Factors that inhibit external
sources of capabilities such as core rigidity (Leonard-­
Barton, 1992) and path dependence (Coombs and
Hull, 1998) are eased off by new technological combi-
nations, which promotes innovation.
The third stream of researches apparently takes
a more dynamic viewpoint. Sampson (2007) adopts
patent and citation data and results in a curvilinear
relationship between alliance firms’ technological
diversity and innovation performance. Cohen and
Caner (2016) also find that knowledge heterogeneity
increases breakthrough inventions up to a point when
it begins to disturb such activities. Gilsing et al. (2008)
prove that exploration being an inverted U-­shaped
function to technological distance. The curvilinear
R&D Management 2021  3
Si Zhang, Jizhen Li and Na Li
relation suggests that excessive diversity impairs
firms’ capability to recognize and utilize knowledge
lied within partner organization, which echoes with
Baum et al. (2010) that also proposes if firms’ tech-
nological profiles are similar, they will find they have
little to learn; if they are too different, they will find
it is hard to understand their partners making learning
difficult. However, the attempts to interpret the curvi-
linear effect by these studies felt somehow unsatisfy-
ing for two main reasons. First, they mainly adopt an
absorptive capacity angle which overrated the effect
of learning in innovation. Interestingly, Nooteboom
(2001) proposed that cognitive distance (diversity)
impairs absorptive capacity but enhance innovation.
A more recent work, Haans (2019), discovered that
contingent on the relative strength of distinctiveness,
both U-­shaped and inverted U-­shaped effects may
appear, which means the effects of the distinctiveness
of partners on performance differ depending on how
different they are. Therefore, we argue that technol-
ogy heterogeneity should be put in the context of a
firm’s overall alliance strategy in which learning and
absorbing should be viewed as a periodical influenc-
ing factor. Second, these studies failed to provide
practical guidance for firms in choosing alliance part-
ners considering their technological distance. Is there
a so-­called right degree of diversity?
Having review existing literature, it is obvi-
ous that the final verdict for the role of technology
heterogeneity is yet to come and that it deserves a
more comprehensive study. We argue that extant
researches have made their observations at a certain
point in time during the process of R&D collabora-
tions so that they come up with different conclusions
as partner’s relative status changes along the project
life cycle. As Uzzi (1997) and Mowery et al. (1998)
point out that partners tend to grow alike in terms
of knowledge profiles indicating a possible shift
of positionings within an alliance network. The up
and downs of innovation output pattern occur where
firms take different actions in the exploration, learn-
ing, integration and reinventing of partner knowledge
bases. Therefore, adopting a dynamic lens, we pro-
pose that as partner technological diversity increases,
collaborative innovation performance should follow
a periodical pattern. The paper will conclude by pro-
viding practical suggestions to firms in choosing alli-
ance partners judging by their technological profile.
3. Data & methodology
We base our analysis on a questionnaire survey data on
413 National High and New Technology Enterprises
of China with information on their R&D projects
4  R&D Management 2021
jointly carried out with their allied firms. According
to China’s Regulations on the Identification
and Management of New and High Technology
Enterprises, National High and New Technology
Enterprises of China are enterprises that register in
the territory of China, which engage in continuous
research and development activities and the transfor-
mation of technological achievements, forming the
core intellectual property rights of enterprises, and
carrying out business activities on the basis of the
‘high and new technology fields supported by the
state’ (excluding Hong Kong, Macao and Taiwan) for
more than one year. High and New technology firms
are chosen primarily because they are R&D intensive
and more collaborative. We sample firms from four
industries that have a broad presence in China: chem-
ical and pharmaceutical, electronic and other electri-
cal equipment, industrial and commercial machinery
equipment, and fabricated metal and other materials.
The survey was conducted during 2010 to the end
of 2012 with the direct assistance of a Chinese gov-
ernment agency in Jiangxi (Municipal Science and
Technology Commission). Among 34 provincial-­
level administrative regions, Jiangxi’s environ-
ment for scientific and technological progress was
ranked number 18, S&T investment was number 19,
however, the rate of increase for both indexes are
amongst the highest in the nation around the time of
the survey1. We followed the key informant approach
to collect data from one R&D manager at each tar-
get firm. 413 questionnaires were returned, giving a
response rate of 33.83%. The survey targets at single
dyadic alliance networks that each respondent enter-
prises have formed. In the sample, there are 12 equity
alliances and 292 non-­equity-­based alliances. Their
primary difference relevant to our analysis is the use
of administrative controls (Nippa and Reuer, 2019),
which might affect the outcome of innovation. As
non-­equity arrangements are more flexible (Narula
and Martinez-­Noya, 2015), it explains why we found
292 non-­equity alliances out of a sample of 304 firms
in an investigation of R&D collaboration partner-
ships. Thus, this data allows insights into the for-
mation, governance and performance of the dyadic
partnership. The depth and scale of the survey is rare
in that it contains both objective measurements and
respondents’ subjective evaluation of their partners
and the R&D alliances, which are invaluable infor-
mation to most alliance studies (Tables 1 and 2).
The survey result is qualitative in that, for exam-
ple, heads of the companies were asked to evaluate
on relative scales how they would position their tech-
nological bases against that of their alliance partners.
The design of the questionnaire incorporated an indi-
rect questioning method to reduce social desirability
© 2021 RADMA and John Wiley & Sons Ltd
 Partner technological heterogeneity and innovation performance of R&D alliances

Table 1.  Demographic profile of the sample (N = 413) Knowledge acquisition; (3) Knowledge assimi-
Industry No. of firms Percentage lation; (4) Knowledge creation; (5) Innovation
management ability; (6) Team-­working; and (7)
Chemistry & Pharmaceutical 79 19.1
Communication skills.
New material & New energy 123 29.8
Metal 18 4.4 Since each performance indicators is composed of
Machinery & Equipment 42 10.2 a few variables, we condense the information they
Environment 22 5.3 carried into variables that could represent the overall
Optical 68 16.5 alliance outcome. Thus, in order to obtain the com-
Software 23 5.6
posite index of 𝜂 1, 𝜂 2, principal component analysis
(PCA) is employed to extract the corresponding
Rubber, service, etc. 26 6.3
comprehensive information. Information is extracted
by maximizing the objective function max [COR (Y)].
The results of the PCA are shown in Figure 1.
bias as suggested by Fisher (1993). Meanwhile, it
also provides quantitative statistical data. There are
objective quantitative questions, that is, patent num- 3.2. Independent variables
bers and R&D intensity. We believe that a combina-
Phelps (2010, p. 894) clearly defines technological
tion of soft and hard indicators will jointly produce
heterogeneity in a collaborative innovation para-
a better prediction. To further examine the accuracy
digm as “…the extent to which the technologies
of the respondent firms’ self-­reported information,
pursued by a firm’s alliance partners are different
20 annual reports firms in our sample were obtained
from one another and from those of the focal firm.”
from the public listed company database and cross-­
This divergence can be further classified according
examined with the self-­reported information. 100%
to whether firms explore different industry or techni-
agreement was observed. Variables and the formation
cal domains (Tyre and von Hippel, 1997). Meyer and
of latent variables can be found in Tables  3 and 4,
Subramaniam (2014) suggest that innovators should
Appendix.
explore across different technical domains rather than
industry domains in that the widening of industry
3.1. Dependent variables: R&D scope hinders the appropriation of technical value.
collaboration outcome However, having observed firm performance on the
stock market, Baum et al. (2000) argue that firms with
The performance of R&D alliances is evaluated in cross-­industry alliances significantly outperformed
two aspects: technology & product development out- those without such connections. Similarly, Filiou and
come (𝜂 1) and innovation capability elevation (𝜂 2), Massini (2017) also support that intra-­industry col-
which are composed of the variables listed below. In
laboration offers less innovation opportunities than
the questionnaire survey, respondents were asked to
inter-­industry cooperation. We are provoked by the
evaluate their perceptions on the following questions
conflict between existing findings and intrigued to
based on 1-­7 Likert Scale.
examine the difference in innovation performance
1. Compared to your rivals, how would you rate of both cross-­industry technological collaborations
the new product development in terms of (1) and intra-­industry cooperation. Thus, in this paper,
cost; (2) efficiency; (3) duration; (4) quality we denote two technological dispersion types as our
and function and (5) innovativeness. key independent variables: industry domain diver-
2. How do you rate the improvement in the follow- gence (𝜉 1) and partner technological heterogeneity
ing capabilities? (1) Knowledge recognition; (2) (𝜉 2). Industry domain divergence occurs when firms

Table 2.  Descriptive data of firm statistics

Age New product sales Product sales R&D input Business scale
Mean 13.24 509534.92 675429.16 28040.12 1030174.42
Median 12.00 3021.00 8298.50 486.69 10343.00
Mode 8 0 .00 500.00 2000.00
Percentage 25 8.00 767.00 2392.59 180.00 3300.00
50 12.00 3021.00 8298.50 486.69 10343.00
75 15.00 11423.60 25441.75 1026.79 30952.70
(ten thousand RMB).

© 2021 RADMA and John Wiley & Sons Ltd R&D Management 2021  5
Si Zhang, Jizhen Li and Na Li
Figure 1.  The coefficients in extracting comprehensive information.
explore outside their current technology context and
seek new innovation inputs from other industries
while technological heterogeneity is considered as a
source of non-­situated knowledge which is the diver-
sification of firms’ core R&D technology.
According to established literature, the following
variables are also chosen which influence the deci-
sion of alliance formation, the process and the out-
come of the alliances. In the survey, respondents are
asked to evaluate the truthfulness of the statements,
using 7 Likert Scale, as documented in Appendix
Table A2. Below is the discussion regarding the rea-
sonings for variable selections.
1. Cooperative Willingness (𝜉 3): Inter-­organizational
knowledge sharing is essential to both innovation
performance and learning outcome (Calantone et
al., 2002). Sampson (2007) discussed how willing-
ness can affect value appropriation from collabo-
rations. For heterogeneity in alliance technology
to stem positive effects in knowledge transfers,
firms’ willingness of sharing is a key driver.
2. Partner Trust (𝜉 4): There are many factors that
work against value co-­creation such as opportun-
ism behavior and trust issue (Dyer and Singh,
1998; Gulati and Singh, 1998). Therefore, the
study takes into account the level of trust between
partners.
3. Culture compatibility (𝜉 5): Firms concern about
the unintended spillover of core knowledge.
Recent studies have connected the willingness of
knowledge sharing with organization culture (Xue
and Zhang, 2010; Wiewiora et al., 2013; Ritala et
al., 2015).
4. Level of Commitment (𝜉 6): In the questionnaire,
respondents are asked to evaluate the importance
of both partners’ contribution of resources to the
success of innovation.
5. Partnering Experience (𝜉 7): Prior alliance ex-
perience affects a firm’s capability in the cap-
turing, sharing and dissemination of valuable
6  R&D Management 2021
know-­how (Kale et al., 2002). The efficiency
of knowledge transfer is improved when firms
become familiar with their partners’ knowl-
edge during repeated interaction (Jensen and
Szulanski, 2007). The repeated partnership has
an impact on alliance and firm performance
(Wuyts et al., 2005; Goerzen, 2007; Gulati
et al., 2009).
6. R&D intensity (𝜉 8): the ratio of a firm’s reported
expenditure on R&D to sales (Teece, 1980;
Baysinger and Hoskisson, 1989).
The comprehensive variable 𝜉 3 and 𝜉 5 are also
obtained by PCA. 𝜉 5 is calculated by adding the
two principal components together, where the
weights are obtained based on their proportion of
variance. The corresponding coefficients are dis-
played in Figure 2.
4. Model estimation and results
In order to infer the effect of technological hetero-
geneity on the outcome of collaborative innovation
with assumptions as few as possible, the following
semi-­parametric additive regression models (1) and
(2) are employed.
𝜂 1 = f1,1 (𝜉 1 ) + f1,2 (𝜉 2 ) + g1,1 (𝜉 3 ) + g1,2 (𝜉 5 ) + 𝛽 1,4 𝜉 4
+𝛽 1,6 𝜉 6 + 𝛽 1,7 𝜉 7 + 𝛽 1,8 𝜉 8 + 𝜀1 (1)
𝜂 2 = f2,1 (𝜉 1 ) + f2,2 (𝜉 2 ) + g2,1 (𝜉 3 ) + g2,2 (𝜉 5 ) + 𝛽 2,4 𝜉 4
+𝛽 2,6 𝜉 6 + 𝛽 2,7 𝜉 7 + 𝛽 2,8 𝜉 8 + 𝜀2 (2)
In model (1) and (2), fi,j and gi,j, i = 1, 2, j = 1, 2
are unknown smoothing functions, and 𝛽 i,j,
i = 1, 2, j = 1, 2, 3, 4 are parametric regression coef-
ficients, 𝜀1 and 𝜀2 are systematic error. In model (1)
and (2), variables 𝜉 1 and 𝜉 2 are put in the nonparamet-
ric parts to explain their nonlinear effect on 𝜂 1 and
© 2021 RADMA and John Wiley & Sons Ltd
 Partner technological heterogeneity and innovation performance of R&D alliances

Figure 2.  The coefficients in composing ξ3 and ξ5.

𝜂 2. Since we assume that being in different industry regression function and 𝛽 is the regression coefficient
technology fields to our partners and having different we need to estimate. The quasi-­likelihood estimation
R&D technologies to our partners may have influ- is used to get the estimator of f .
ences on the R&D output and innovation capabil- ∑ t − Tj
ity that are not necessarily monotonic. Cooperative K( h )(Yj − Xj 𝛽)
j
willingness (𝜉 3) and culture compatibility (𝜉 5) are ̂f𝛽 (t) = (3)
∑ t − Tj
expected to have nonlinear influences so that they K( h )
are placed in the nonparametric section as well. j

Meanwhile, other explanatory variables may have a

relatively more straight forward impact. Therefore, In (3), K is the kernel function and h is the band-
our setup could avoid overfitting caused by too com- width. The estimator of 𝛽 can be obtained:
plex model design. Test results are shown below: ̂
𝛽 = [(X − X) ̂ − 1 (X − X)
̂ � D(X − X)] ̂ � D(Y − ̂
Y)
where X represents the matrix with i th row Xi, X̂
represents the matrix with i th row.
4.1. Estimation test of semi-­parametric
additive model (1) and (2) ∑ � Ti − Tj � ∑ � Ti − Tj �
K h
Xj K h
Yj
Model (1) and (2) can be estimated by the kernel-­ ̂i =
j
̂
j
based method. (Severini and Staniswalis, 1994; Fan
X ∑ � T i − Tj � , Y= ∑ �
T −T
�
K K ih j
and Li, 2003). For the convenience of understanding, j
h
j
we describe the statistical idea for estimation semi-­
parametric model with only one nonparametric func- In this paper, K is chosen to be the normal density
tion. For the more general case, the estimation steps function, and h is determined by the GCV method.
can be found in Fan and Li (2003), and which can be
carried out by R using package KernGPLM (Härdle
et al., 2004). 4.2. Model estimation
Suppose we need to estimate The regression curves in model (1) and (2) are esti-
E(Y|(X, T)) = X𝛽 + f(T). In which, f is the smooth mated by kernel-­based method. In addition, we use

© 2021 RADMA and John Wiley & Sons Ltd R&D Management 2021  7
Si Zhang, Jizhen Li and Na Li
Figure 3.  The estimated curve of regression functions and their confidence band.
T-­test to examine the significance of parametric
items, and F-­Square test to test the significance of
nonparametric function. Furthermore, we estimate
whether the increasing or decreasing trend of the non-
parametric regression function is significant by SiZer
analysis method. SiZer (significant zero crossing of
the derivatives) is a multiscale smoothing method for
exploring trends in data. The basic idea of SiZer is to
explore significant features by using a wide range of
smoothing parameter values (Chaudhuri and Marron,
1999, 2000). The inference results of SiZer is a SiZer
map. In SiZer map, the y-­axis is the value of log(h), h
is the bandwidth used in kernel estimation, the x-­axis
is the value of x. Pixel (log(hs ), loghs+1 , xg , xg+1 )
is colored blue to imply an increasing trend of ̂fhs.
Likewise, red is used to imply decreasing, and purple
is used when ̂fhs is not significantly different from
some constant. Gray is used to indicating there is not
enough observation to get a reliable inference.
4.3. Results
Model (1) and (2) are estimated and tested based on
the method described above. Variables 𝜉 4 , 𝜉 7 , 𝜉 8 are
8  R&D Management 2021
not significant, meanwhile, 𝜉 2 has a linear influence
on 𝜂 1. We, therefore, delete 𝜉 4 , 𝜉 7 , 𝜉 8 from model (1),
and move 𝜉 2 to the parametric part. In fact, 𝜉 1 is sig-
nificant only if 𝜉 2 is deleted from model (1). Then
model (1) is modified as:
( ) ( ) ( )
𝜂 1 = f1,1 𝜉 1 + g1,1 𝜉 2 + g1,2 𝜉 5 + 𝛽 1,2 𝜉 3 + 𝛽 1,4 𝜉 4
+𝛽 1,6 𝜉 6 + 𝜀1 (3)
Likewise, regression model (2) is adjusted to:
𝜂 2 = f2,2 (𝜉 2 ) + 𝛽 2,3 𝜉 3 + 𝛽 1,7 𝜉 7 + 𝜀2 (4)
The estimation and test results of model (3) and
(4) are given in Tables 3 and 4. The estimated curve
of nonparametric regression functions and SiZer
maps are given in Figure 3–­5, respectively.
The significance of the effects of Industry
Domain Divergence (𝜉 1) obviously drops as Alliance
Technology Heterogeneity (𝜉 2) joins in the model.
In Model (3): Alliance Technology Heterogeneity
(𝜉 2 ) has an S-­shaped impact on R&D output (𝜂 1). We
decompose the S curve as follows: From heterogene-
ity is valued at 1–­4, as the difference between partner
© 2021 RADMA and John Wiley & Sons Ltd
 Partner technological heterogeneity and innovation performance of R&D alliances
R&D technology increase, innovation performance
is improved. From 4 onwards, a U-­shaped pattern
follows indicating after the point where technolog-
ical heterogeneity is valued at 4 innovation perfor-
mance may go into a not so steep descending until
the value reaches 6 and picks up again. The overall
trend is up-­lifting.
If 𝜉 2 is left out, the relationship between Industry
Domain Divergence and R&D output is a significantly
inversed U shaped. As shown in Figure 4, influences
of 𝜉 2 on R&D output increases at first then decreases
until 𝜉 2 reaches beyond a certain point (value  =  6)
when R&D output begins to climb again. As demon-
strated in Figure 4, Industry Domain Divergence (𝜉 1)
is almost linear to R&D output, and since we assume
that the corresponding non-­linear function of 𝜉 1 is
through the origin, the effect of Industry Domain
Divergence is insignificant, which fits with the results
in Table  3 where Industry Domain Divergence has
no significant impact on R&D output. After Industry
Domain Divergence is removed from Model 3, the
effects and significance of all other variables remain
so that we will skip the related discussion here. The
effect of Cultural Compatibility (𝜉 5) on R&D output
is more complex, but Figure 4 indicates that the vari-
ances at two endpoints are not significant and the lift-
ing effect on R&D output only appears between (0.5,
1.5) section. Trust (𝜉 4) and Level of Commitment (𝜉 6)
has a significant positive effect on R&D outputs.
The above results show that having different
industry technology to alliance partners has no
significant effect on firms’ innovation capability.
Figure 5 and 6 demonstrate that alliance technologi-
cal heterogeneity (𝜉 2) has a significant positive effect
on innovation capability (𝜂 2), especially when the
Figure 4.  The SiZer map for testing the first-­order derivative for functions of ξ1, ξ2, ξ5 (blue for increasing, read for decreasing, purple
for no trend).
© 2021 RADMA and John Wiley & Sons Ltd
value of 𝜉 2 is in the mid-­high (3,6) range. In addition,
it has a significant positive linear effect on innovation
capability. Cooperative willingness (𝜉 3) and prior
partnering experience (𝜉 7) have positive impacts on
innovation capability. Other variables had no signif-
icant effect. On the whole, the explanatory power of
the model is weaker for explaining innovation capa-
bility is weaker than R&D output, and the adjusted R
is 0.502. The above results indicate that innovation
capability may be affected by other factors that are
not identified by the research.
4.4. The influence of technological
heterogeneity on objective
measurement of firm performance
To verify our key findings, we examine how patent
is affected by technological heterogeneity. Although,
beside patent and citation, innovation output includes
novel knowledge, technology, new products and
many forms of tangible and intangible outcome so
that patent only indicates a proportion of R&D out-
put, as a means to verify the above key effect, this
paper incorporates patent application number for
reference, which enables comparison with existing
research. We introduce the number of patent appli-
cation as a direct measurement of R&D output and
examine how it is affected by industry domain diver-
gence (𝜉 1) and partner technology heterogeneity (𝜉 2).
Semi-­parameter Poission Regression is applied. The
results reveal that both 𝜉 1 and 𝜉 2 have linear relations
with patent application so that both are entered in the
linear section. As other variables including 𝜉 3 , 𝜉 5 , 𝜉 6
are insignificant, they are deleted from the model.
Thus, the final model is as follows:
R&D Management 2021  9
Si Zhang, Jizhen Li and Na Li

models, the fitting effect of the model has decreased,

the shape of the curve, symbol and significance are
all consistent suggesting that the results are robust.
The results of the robustness check are demonstrated
in Figure 7 and Tables 6 and 7, which will be further
discussed below.
After resampling, we modified model (3) and con-
structed the following parametric regression model
(6). The estimation result (Figure  7) is consistent
with Figure 3.

𝜂 1 = 𝛽 0 + 𝛽 11 𝜉 1 + 𝛽 12 𝜉 21 + 𝛽 13 𝜉 31 + 𝛽 21 𝜉 2
(6)
+𝛽 22 𝜉 22 + 𝛽 23 𝜉 32 + 𝛽 4 𝜉 4 + 𝛽 6 𝜉 6 + 𝜀

Model (4) and (5) are also reconstructed using

resampled data, and the regression results (Table 7)
Figure 5.  Estimated curve of f2,2 (𝜉 2 ). are consistent with the original. Model (5) is rela-
tively simple, which is only resampled and the model
is unchanged. The result is very close to the original,
and the result will not be repeated here.
Log (Patent) = 𝛽 1 𝜉 1 + 𝛽 2 𝜉 3 + 𝛽 4 𝜉 4 + 𝜀 (5)
By resampling the data and replacing the original
model with a relatively complex nonlinear paramet-
As shown in Table  5, the results indicate that ric model and deleting variables of unknown sig-
industry domain divergence negatively affects patent nificance (e.g. x5 in Model 3) to verify the original
application number while partner technology het- conclusion. The test results are robust.
erogeneity increases patent application. The result
suggests that partners should be in the same industry
domain but different technology field, which largely 5. Conclusion and discussion
coincides with our earlier analysis.
5.1. Conclusion
4.5. Robustness check Prior research produced very inconclusive results
A robustness check is performed to further sup- on the roles of alliance technology heterogeneity in
port our empirical results. We resampled data to R&D alliances. This work attempts to find a con-
reconstruct the models (3) (4) and (5) in the manu- clusion by using a different type of data from exist-
script and obtained the same conclusion as before. ing works and a new methodology that, to the best
Specifically, we resampled the data and modified the of our knowledge, has not being applied in similar
models by replacing the non-­parametric part with research contexts. Specifically, we investigate the
a cubic polynomial function while maintaining the relationships between two classes of technology het-
parameter part. Although due to the use of parametric erogeneity, industry domain divergence and alliance
technological heterogeneity, and firm’s innovation
Table 3.  Estimation and testing result of model (3) performance, using a questionnaire survey date of
413 firms that engaged in collaborated R&D activ-
Estimate Std. Error T-­value P-­value ities and their joint R&D projects successfully com-
Intercept −3.67 0.724 −5.067 0.000 pleted within the recent three years of the survey.
𝜉4 0.287 0.105 2.738 0.007 Generalized semi-­parametric model is used in analy-
𝜉6 0.403 0.116 3.461 0.000 sis, because extant studies have detected both linear
VIF of parametric Part = 1.128 and non-­linear relationships, which were all obtained
Nonparametric part under the corresponding assumptions. Using the
F-­value P-­value semi-­parameter model, we are free from the require-
f1,1 (𝜉 1 ) 2.306 0.108 ment of the hypothesis so that we are able to detect
f1,2 (𝜉 2 ) 3.882 0.002 the shape that is much close to its actual being. By
g1,2 (𝜉 5 ) 3.583 0.001 relaxing the assumptions, we are able to picture the
effects just as they are. The resulted S-­shaped pattern
R-­
Sq.(adj)  =  0.748, Deviance explained  =  79.3%
GCV = 1.3034, h = 0.743. is much closer to reality.

10  R&D Management 2021 © 2021 RADMA and John Wiley & Sons Ltd
 Partner technological heterogeneity and innovation performance of R&D alliances
We provide insights into R&D alliances by ana-
lyzing respondents’ subjective evaluation of the
degree and importance of technological heterogene-
ity and its relations with both subjective and objec-
tive collaborative innovation outcome. Our findings
indicate that as technology heterogeneity between
partners increases, the R&D output of joint projects
will follow an ascending S-­shaped curve and firms’
innovation capability will elevate. Technological het-
erogeneity triggers the seeking, recognition, acqui-
sition and assimilation of knowledge. Partners with
distinct technology and knowhow, by collaborating
in R&D projects, can improve their knowledge sourc-
ing and alliance management abilities during the
knowledge exchange process and thus enhance their
innovation capability. However, cross-­industry R&D
collaboration will generate R&D output following an
inverted U-­shaped pattern, indicating the existing of
industry barriers and an industry crossover may have
a negative impact on R&D performance.
5.2. Discussion and theoretical
implications
The fundamental process in any alliance includes
value creation and value appropriation (Hamel,
1991) in which technological diversity may lead to a
reapportion of value between the partners. There is a
competition between cooperators in alliances for not
just value but knowledge acquisition. While Prahalad
and Hamel (1990) suggest that managers often con-
cern about being ‘out-­learned’ by their partnering
firms which makes them redundant in a partnership,
we argue otherwise. Whether to cooperate or to
compete with partners is subject to the heterogene-
ity of partners technological bases. We believe that
the differences between firms’ technological profile
associate deeply with firms’ competitive strategy and
thereafter affect profoundly the positioning of firms
within an alliance. As firms’ competitiveness grow,
their focus, commitment and hence contribution to
collaboration will change so that innovation outcome
Table 4.  Estimation and testing result of model (4)
Estimate Std. Error T-­value P-­value
Intercept −5.864 0.956 −6.160 0.000
𝜉3 0.764 0.145 4.772 0.000
𝜉7 0.292 0.073 4.064 0.001
VIF of parametric part = 1.032
Nonparametric part
F-­value P-­value
f2,2 (𝜉 2 ) 1.672 0.001
R-­Sq.(adj) = 0.502, Deviance explained = 52.8% GCV = 3.776,
h = 0.821.
© 2021 RADMA and John Wiley & Sons Ltd
can have its ups and downs like the S-­shaped curve
that we find in this research.
To further our understanding of alliance technol-
ogy heterogeneity, based on the Likert Scale of tech-
nological heterogeneity that was originally designed
for the survey (Table 8), we propose a typology for
partner technological heterogeneity. Here, we argue
that the differences between partners’ R&D technol-
ogy may manifest in three ways: a. Alliance partners
have complementary technological resources where
industry domain divergence and technology hetero-
geneity may co-­exist, e.g. the Circular (a pump man-
ufacture) and Sunshine (a solar heater manufacture)
case where partners contribute their key knowhow
to fill the technical gaps of their joint R&D project
(Hu et al., 2015); and the Toyota and Toyota Boshuku
case documented in Dyer et. al. (2018) where the lat-
ter, is one of the suppliers to the former, develops and
evolves its technology and technological strategies
around the former. b. Alliance partners are positioned
at different links in a value chain where partners are
more likely adopting different technology in the same
industry but are supplementary to one another, that
is, partners are in upstream and downstream relations
where they are in the same industry and related tech-
nology field but possess different production tech-
nology. As demonstrated in Rothaermel and Boeker
(2010), when a biotechnology firm’s competence
is combined with drug development in an alliance,
it is what we call an upstream value chain comple-
mentarity. In Dell’s buy-­to-­stock strategy, Dell relies
on its key partners who have the supplementary
technologies to provide modules and components,
and assembles a computer within only four hours.
According to Michael Dell, the CEO of Dell com-
pany, “Dell’s partners are treated as if they’re inside
the company” (Magretta, 1998). To keep up with the
demand of Dell’s customers, Dell and Dell suppliers
are pushed to keep improving and innovating in their
areas of expertise. Both complementarity and supple-
mentary expand firms’ knowledge base (Jiang et al.,
2010) and are more likely to encourage innovation.
c. There is considerable disparity between alliance
partner’s technological trajectories (here we denote it
as “absolute disparity”) where technology heteroge-
neity dominates, i.e firms at their early stages of tech-
nological development join in collaborative R&D
projects with other enterprises (in the same industry)
with advanced technology in order to capture learn-
ing opportunity and take advantages of technological
spillover. This is in line with what researchers have
identified as a learning alliance (Khanna and Nohria,
1998) where the main objective of the partners is to
learn from each other (Hamel et al., 1989; Hamel,
1991). By identifying the sources of technology
R&D Management 2021  11
Si Zhang, Jizhen Li and Na Li

heterogeneity, the variance in collaboration results a more instructive way for firms who seek to form
may be better anticipated and accordingly, different strategic technological partnerships in accordance to
alliance strategies may be chosen. For theoretical their initiatives, that is, whether they are searching
development, future studies could, on the one hand, for complementary technology, upstream and down-
investigate the effects of the aforementioned three stream cooperation or playing technological catchup.
types of heterogeneity on innovation considering In searching for possible reasonings behind the
also the periodic characteristics of the R&D project S-­shaped R&D output pattern, we analyze joint
life cycle, and on the other, develop this typology in R&D projects in our sample that have to proceed
into second and third years of collaboration and pro-
pose that alliance strategy are adjusted at different
stages of the R&D project life cycle, which reflect
on the typology of technological heterogeneity as
we addressed earlier. In fact, the fluctuating effect of
partner technological heterogeneity echoes with the
paradox of how firms should balance the conformity
that is propelled by isomorphic competition and the
idiosyncrasy pressed by the continuous need for a
competitive edge.
One way to interpret the S-­shaped curve is to
incorporate the curvilinear pattern with the R&D
project life-­cycle. The first climb starts when diverse
knowledge and technology are explored and com-
bined most likely in the initiation and growing stages
and the first inflexion appears when partners grow
Figure 6.  SiZer map for f2,2 (𝜉 2 ). alike technologically as they have acquired partner’s
technology and knowhow possibly through organi-
zational learning when the collaboration projects
Table 5.  Semiparametric poisson regression results of the go into maturity. They combine partner technology
effect of industry domain divergence and technological into more of an explorative innovation and gener-
heterogeneity on patent application ate new products and technology till a point where
Coef. T.statistic P-­value they exhaust ways to innovate based mainly on the
(Intercept)
adaptation of partner’s technology, which is when
1.497198 3.977989 6.95E-­05
the marginal R&D output starts to fall. As they then
𝛽1 −0.18004 −4.95948 7.07E-­07
turn their focus to a co-­created knowledge base and
𝛽2 0.252272 3.930773 8.47E-­05
begin mining in there, R&D output will pick up again
𝛽4 −0.11285 −2.62971 0.008546 and the second climb will appear. In a mature alli-
R-­sq.(adj) = 0.352, F.test P-­value = 0.000. ance relationship, firms thrive to find new ways to

Figure 7.  The estimated curve of regression functions.

12  R&D Management 2021 © 2021 RADMA and John Wiley & Sons Ltd
 Partner technological heterogeneity and innovation performance of R&D alliances

maintain the stability of their alliance by enhancing overall effect of partner technology heterogeneity
their core competence through innovation in fear has an uplifting effect on collaborative innovation.
of becoming redundant. As Dyer and Singh (2018) The other way to better comprehend our findings
suggest, alliance partners both cooperate for value is to explain the curvilinear relationship by incorpo-
creation and compete for value capture. Thereby, we rating the meanings behind each Likert scale number,
further argue that, for sustained R&D performance which are shown in Table 8 above, which was pro-
of collaborative projects between alliance partners, vided as guidance originally to the respondents who
healthy inner alliance competition (often associ- participated in our survey. We can incorporate the
ated with learning) and cooperation should co-­exist contents of the table to explain to respondents how
and be intentionally encouraged and well balanced. the level of heterogeneity should be perceived and
However, it is worth noting that the S-­shaped pattern evaluated. The first peak (value  =  4) appears when
also keeps an upward-­going trend suggesting that the “firms can understand our partner’s technology that is
novel to us which we can learn and adapt”. It is con-
sistent with the earlier analysis in light of the project
life cycle. At this point, a certain degree of balance
Table 6.  Estimation and testing result of model (3)
can be perceived where partner technology is differ-
Estimate Std. Error T-­value P-­value ent and new but is not too far-­fetching to acquire and
Intercept −4.21 0.841 −5.742 0.000 absorb. From value 4 onwards, the partner’s technol-
ξ1 −1.743 0.467 −3.053 0.003 ogy becomes more unfamiliar and complex to the
focal firm and the innovation performance lowers.
𝛏21 0.186 0.096 2.534 0.012
What’s interesting is that when firms pass ‘We can-
ξ2 6.001 3.534 2.381 0.015 not fully understand our partner’s technology and we
ξ22 −1.290 1.217 −1.955 0.024 find it hard to learn from them’ and go into ‘We have
ξ32 0.085 0.904 1.007 0.045 completely different R&D technology and we don’t
ξ4 0.221 0.201 2.781 0.006 understand our partner’s technology and cannot
ξ6 0.347 0.152 3.955 0.000 acquire it’, innovation performance rises again. That
is to say, when technological heterogeneity becomes
VIF of parametric part = 2.232.
R-­Sq. (adj) = 0.552, Deviance explained = 57.3%. utter, it stirs up innovation. This is in line with extant
research. Simonton (1999) proposes that in a differ-
ent or novel knowledge domain, new insights and
Table 7.  Estimation and testing result of model (4) solution are likely to be found. Solutions from one
Estimate Std. Error T-­value P-­value domain may be applied in another (Hargadon and
Intercept −4.995 0.987 −6.546 0.000
Sutton, 1997) leading to innovation in other indus-
tries. Therefore, the S-­shaped pattern detected in our
ξ2 0.054 0.068 0.998 0.267
research is not a disruption to existing theories but
𝛏22 0.961 0.247 5.832 0.000
a more complete big picture and a full effect that is
ξ3 0.561 0.206 4.698 0.000 closer to reality, which takes into account the changes
ξ7 0.362 0.098 4.532 0.001 that may occur at different stages of collaboration
VIF of parametric part = 1.431. and within different classes of alliance technological
R-­Sq. (adj) = 0.469, Deviance explained = 45.8%. heterogeneity.

Table 8.  Statement of likert scale numbers

Value Explanation
1 We completely understand our partners technology which is slightly different to ours
2 We completely understand our partner’s technology which is related but different (complementary) to
ours, and could be absorbed by us
3 We can understand our partner’s technology, which supplement ours, through working together (up-­and
down-­stream)
4 We can understand our partner’s technology that is novel to us which we can learn and adapt
5 We cannot fully understand our partner’s technology and find it hard to combine out technologies
6 We cannot fully understand our partner’s technology and we find it hard to learn from them
7 We have completely different R&D technology and we don’t understand our partner’s technology and
cannot acquire it

© 2021 RADMA and John Wiley & Sons Ltd R&D Management 2021  13
Si Zhang, Jizhen Li and Na Li
5.3. Managerial implications
An important implication for management is that
balancing knowledge acquisition and sharing tech-
nology with a sound and dynamic co-­ opetition
strategy is crucial to the outcome of partnering with
technologically distinctive collaborators. Seeking the
balance between divergence and the possibility for
gaining from the alliance is one way to obtain bet-
ter performance. To achieve more ground-­breaking
innovation with partners, firms must prepare to step
out of their comfort zone and get ready to march into
unfamiliar technical areas. In light of the project life
cycle, we suggest that firms in the project initiating
and growing stage should try to collaborate with
partnering firms that are in the same industry and
have complement or supplement technologies that
are possible to be recombined with the focal firm’s
existing knowledge base. When collaboration goes
into maturity, firms should consider embed into or
building new partnerships with firms that are very
distinct in terms of their technological capabilities.
This study also points out that, R&D alliances
formed by enterprises coming from different industry
domains, generate R&D output following an inverted
U-­shaped pattern. This suggests that industry domain
divergence may contribute positively to the R&D
performance of the alliance until a certain point, after
which the innovation output of cross-­section collabo-
ration will begin to fall. Technological barriers lying
in various industries hinder the generation of jointly
created value, which, to some extent, echoes with
Dyer and Singh (2018) which argues that divergence
in partner complementary resources may lead to
diminished value creation. However, in this research,
when partner technology heterogeneity is taken into
account, the impact of industry domain difference is
no longer significant. For this, we further our study
and examine the effects on patent data. By incorpo-
rating analysis of the effect of technological diver-
sity on patent application number, we respond to the
inconclusive result of extant research by proposing a
precondition for a positive connection between tech-
nological heterogeneity and R&D output, which is
that partnering firms should remain in the same indus-
try technology bracket but develop their own heter-
ogenous R&D technology. Although prior research
has debated that too much difference creates obsta-
cles for learning (e.g. Oxley, 1996; Grant, 1997), we
argue that as long as partners are in the same industry
domain, the technical divergence between partners is
a healthy pusher for innovation. We, therefore, pro-
pose that, in most cases, firms are better off choos-
ing partners in the same or related industries but
perhaps working on different technology trajectories
14  R&D Management 2021
or specializing in distinct technical domains so that
firms will be able to perceive, understand, learn and
absorb partner’s knowledge while generating new
know-­how and technology by combining different
resources of both parties.
5.4. Limitations and future studies
This work is based on questionnaire survey results
which shows a more subjective point of view in the
shoes of firms that are embedded in dyadic alliance
networks. Hence, we are able to understand, by rely-
ing on respondents’ understanding of technology
heterogeneity and innovation, how the differences
of R&D technology are perceived in terms of its
contribution to firms’ collaborative innovation per-
formance. However, the paper has three suspended
issues that we leave for further studies: Firstly, it
does not incorporate quantitative explanatory vari-
ables and explained indicators that may more intu-
itively reflect joint R&D input and partner attributes
and how they relate to economic benefits gained
through the R&D collaborations. Secondly, we focus
on dyadic partnerships. Future studies could perhaps
investigate alliance network technology heteroge-
neity with considerations of portfolio effects and
their influences on the meso-­level value co-­creation.
Thirdly, the S-­shaped output pattern calls for closer
investigations from a dynamic angle as the relative
technological positioning of alliance partners may
alter which is contingent on the development of their
competence and competitiveness.
Acknowledgement
This paper is supported by the Fundamental Research
Funds for the Central Universities (No. Y95402R),
China Ministry of Science and Technology (No.
2017ZG–­002).
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1
Sources: Ministry of Science and Technology of the
People’s Republic of China. http://www.most.gov.cn/
dfkj/jx/
Si Zhang, PhD is Associate Professor at School of
Economics and Management, University of Chinese
Academy of Sciences. Post-­doctoral Researcher at
School of Economics and Management, Tsinghua
University. Graduated from Reading University,
England.
Jizhen Li, PhD is professor of innovation and en-
trepreneurship management at Tsinghua University
School of Economics and Management (SEM),
the associate Dean of Tsinghua SEM. He holds
a PhD (2002) in Management Science, a MA
in Management Science, and BE (1997) both in
Automobile Engineering and Industrial Engineering
from the Tsinghua University.
Na Li, PhD is Specialist Algorithm Researcher at
Ping An Technology (Shenzhen) Co., Ltd. She fo-
cuses on the theoretical research of modeling and
simulation, statistical learning, optimization algo-
rithms, and application research in assisting decision-­
making of governments and enterprises.
R&D Management 2021  17
Si Zhang, Jizhen Li and Na Li

APPENDIX

Table A1.  Variable setting

Variables Statements Values
X1 Our alliance partner and my company belong to different techni- Xi = 1 totally disagree; Xi = 2
cal areas ­disagree; Xi = 3 a little disagree;
X2 Our alliance partner and my company possess different R&D Xi = 4 Neutral; Xi = 5 a little agree;
technology Xi = 6 agree; Xi = 7 totally agree
X3 Regular technical exchange conferences with the alliancing
company are organized
X4 We transfer technology to partners in exchange for opportunities
to learn their technology
X5 We are willing to share our knowledge with alliancing partners
X6 My company and the partner organization collaborate in adapt-
ing both of our existing technologies in meeting new market
demands
X7 Level of trust
X8 We have different values for our partner firm
X9 We have different operational procedures for our partner firm
X10 We have a different decision-­making process for our partner firm
X11 We understand the partner firm’s culture
X12 We accept the partner firm’s culture
X13 The contribution of resources by both my company and my alli-
ance company is important to the success of the collaboration
X14 The length of the collaboration X14 = continuous numbers
X15 The ratio of the firm’s reported expenditure on R&D to sales X15 = continuous numbers
Y1 Compared to your rivals, how would you rate the new product Yj = 1 very bad; Yj = 2 bad; Yj = 3
development in terms of (1) cost a little bad; Yj = 4 Neutral; Yj = 5
Y2 Compared to your rivals, how would you rate the new product a little good; Yj = 6 good; Yj = 7
development in terms of (2) efficiency very good
Y3 Compared to your rivals, how would you rate the new product
development in terms of (3) duration
Y4 Compared to your rivals, how would you rate the new product
development in terms of (4) quality and function
Y5 Compared to your rivals, how would you rate the new product
development in terms of (5) innovativeness
Y6 How do you rate the improvement in the following capabilities?
(1) Knowledge recognition
Y7 How do you rate the improvement in the following capabilities?
(2) Knowledge acquisition
Y8 How do you rate the improvement in the following capabilities?
(3) Knowledge assimilation
Y9 How do you rate the improvement in the following capabilities?
(4) Knowledge creation
Y10 How do you rate the improvement in the following capabilities?
(5) Innovation management ability
Y11 How do you rate the improvement in the following capabilities?
(6) Team-­working
Y12 How do you rate the improvement in the following capabilities?
(7) Communication skills

18  R&D Management 2021 © 2021 RADMA and John Wiley & Sons Ltd
 Partner technological heterogeneity and innovation performance of R&D alliances

Table A2.  Latent variables

Variables Labels Variables
included
𝜉1 Industry domain divergence X1
𝜉2 Alliance technology X2
heterogeneity
𝜉3 Cooperative willingness X3, X4, X5, X6
𝜉4 Trust X7
𝜉5 Culture compatibility X8, X9, X10,
X11, X12
𝜉6 Level of commitment in X13
joint projects
𝜉7 Partnering experience X14
𝜉8 R&D intensity X15
𝜂1 R&D output Y1, Y2, Y3, Y4,
Y5
𝜂2 Innovation capability Y6, Y7, Y8, Y9,
Y10, Y11, Y12

© 2021 RADMA and John Wiley & Sons Ltd R&D Management 2021  19