Diversity in Determinants and Impact of R&D Collaboration : Case Study of Robot Technology in Japan

There has been growing interest in the issue of boundary of the firm in R&D. The increasing interest in this topic was partly caused by the increase in the number of co-operative arrangements in R&D and its importance in firmsʼ innovative activities. As technologies are becoming more complex, firms are more dependent on external knowledge and on alliances with other firm in innovation. This means that the old debates about firm-size, market structure and innovation are carrying less and less conviction, as the boundaries of firm are becoming increasingly ʻfuzzyʼ (Teece, 1992). Yet, even though the benefits of inter-firm cooperation have increasingly recognized by firms, boundaries of firms still matter to the organization of innovation. One important factor is market competition among firms. Katz (1986) states that, if a firm tries to conduct R&D collaboration with a partner that competes in the market, part of the rent born out of the collaborative R&D can be lost in the subsequent market competition. This follows the argument that benefits of horizontal cooperation (cooperation between competing firms) are vitiated by the ex post market competition, while there is no such detrimental effect for vertical cooperation (cooperation with suppliers or customers) (De Bondt et at.1992). The same logic can be applied to inter-industry cooperation versus intra-industry cooperation (Steurs, 1995). Another important factor would be transaction costs. Where uncertainty over specifying and monitoring performance of partner is higher, firms will face higher opportunistic risk when they are engaged in collaborative R&D. In-house R&D tends to be more advantageous in this case. These transaction costs are likely to be lower for the collaboration among the firms with close relations such as those with affiliated firms. These discussions above indicate that the benefits of and determinants for R&D collaboration differ depending on type of partner. Yet most of the empirical studies on R&D collaboration do not distinguish R&D cooperation by type of partner. The exceptions to this include Leiponen (2001), who distinguishes R&D cooperation with competitors, customers, suppliers, and universities using 1997 CIS data for Finnish manufacturing firms, and Belderbos et al. (2004), who differentiate these four types cooperative partners using survey data of Dutch firms. This paper empirically examines the heterogeneity in R&D collaboration by differentiating types of collaboration (in-group, non-group, inter-industry, and intra-industry collaboration). In-group collaboration represents the collaboration among the firms in the same group, and non-group collaboration represents collaboration with firms which are outside of the group. While most of previous studies use questionnaire survey data, which inevitably encounter the problem of sampling biases, I use patent data for empirical tests. As the patent data contains data on smaller firms, so the sample is less biased than questionnaire surveys in terms of the size of institutions. Moreover, patent data contain information such as the number of claims, citations, inventors, and technological fields, which can be used as indicators Diversity in Determinants and Impact of R&D Collaboration: Case Study of Robot Technology in Japan