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The impact of R&D-specific factors on the attractiveness of small- and medium-sized enterprises as partners vis-à-vis alliance formation in large emerging economies

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Abstract

This study examines the impact of research and development (R&D)-specific factors in determining the likelihood of small- and medium-sized enterprises (SMEs) from developed countries to be attractive partners vis-à-vis forming alliances with SMEs from large emerging economies (LEEs). This study is founded on the knowledge-accessing theory of alliance formation, which emphasises the higher efficiency gains of knowledge application as opposed to knowledge generation. We extend this theory to SMEs on the basis that smaller firms, because of their resources constraints and drive to survive, are likely to use alliances to access external knowledge bases leading to new product development (NPD) opportunities because of the low feasibility of acquiring knowledge. As a mix of complex knowledge is necessary to develop most modern products and services, SMEs are also likely to adopt a more flexible operational approach and to accept compromises to forge knowledge-accessing alliances. We illustrate this theoretical development using primary data collected from British and German biotechnology SMEs, declaring the intention prospectively to form alliances with their counterparts in Brazil. Binary logistic regression was used to identify the factors influencing the likelihood of a firm as an attractive alliance partner. Our results indicate that R&D-specific factors influence the likelihood of firms to be attractive alliance partners. In particular, firms showing an in-house innovation history focused on one or few products are more likely to be attractive alliance partners with LEE firms than those that do not. Another R&D-specific predictor that enhances the chances of alliance partner attractiveness with LEE firms is the firm's focused searching and identifying capability relative to technology or equipment that demonstrates good prospects to improve the firm's line of products. A third predictor refers to the firm's awareness regarding non-cost obstacles for its own technological development. Implications for policy makers and practitioners are also discussed.

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