The Innovation Performance Of R&D Alliance Between Incumbents And Start-ups

This paper primarily focuses on whether the R&D collaboration between incumbents and start-ups stimulates firms’ innovative activity. By defining the related concepts, we introduce an NKC simulation model to study the relationship between R&D alliance, strength of ties and innovation performance in the R&D collaboration between incumbents and start-ups. Meanwhile, our research investigates the benefits sharing between old firms and young firms, so as to increase our understanding about the often-debated issue:who reaps the benefits in alliances.Our first result shows that established firms perform better in innovation in a short term, but in a long run, new firms innovate more. Meanwhile, start-ups maintain a positive innovation rate, but the innovation rates of incumbents decrease marginally. Secondly, simulation results show that comparing with the innovation performance before alliance, the innovation performance of both incumbents and start-ups decrease, and that with the increase of strength-of-ties, this negative effect becomes great. At last, our results suggest that established firms benefit more from alliance in innovation than new startups.Our research contributes the current literature in the following ways. Firstly, this paper provides a new approach and tool to the R&D alliance research. Complementing the empirical studies, our results also provide the answer for whether R&D alliances really take positive effects on the innovation performance of incumbents or start-ups. Future, our model provides a potentially effective way to establish alliance. Our model predicts that keeping a "loosely coupled" network is the best way for all the partners in an alliance.