USING RESEARCH-AND-DEVELOPMENT COOPERATIVE ARRANGEMENTS TO LEVERAGE MANAGERIAL EXPERIENCE - A STUDY OF TECHNOLOGY-INTENSIVE NEW VENTURES

During the past decade, increasing attention has been given to the wid espread use of research and development (R&D) strategic alliances and cooperative interorganizational relationships. This research has addre ssed a variety of inter-firm relationships ranging from joint ventures to informal networking. However, most of this literature is based on research involving large established films. More recently, researchers have recognized that small firms or new ventures are also adopting co operative R&D strategies with increasing frequency. A variety of reaso ns for the increasing use of R&D cooperative arrangements in new ventu res has been offered, including the need to complement a new venture's existing internal resources, the need to quickly gain the technical c apabilities to compete in rapidly changing markets, and the desire to minimize the fixed costs associated with acquiring capital assets. Thi s paper reports the results of a study of new high-technology ventures that examined the relationship between performance, the experience of a venture's management team, and its use of R&D cooperative arrangeme nts. The central proposition of this research was that the effectivene ss of R&D cooperative activities is associated with the level of combi ned expertise possessed by the new venture's management team. Specific ally, it was anticipated that new ventures with management teams posse ssing more experience with the industry and/or with similar technologi es would be better able to successfully engage in R&D cooperative acti vities. The primary data analysis technique was moderated regression. The data was collected from Security and Exchange Commission initial p ublic offering registration statements and other archival documents fi led by 210 new ventures in three high-technology manufacturing industr ies. The results of the regression analysis revealed that sales growth was associated with the use of R&D cooperative arrangements. More imp ortant, the results also indicated that this relationship was positive when the new venture's management team was relatively more familiar w ith the industry, markets, and/or with similar technologies. In other words, our results indicate that the relatively more experienced manag ers were more proficient at using R&D cooperative activities to strate gically position their respective firms vis-a-vis their less experienc ed counterparts. Evidently, these managers were better able to identif y the risks and benefits of engaging in such cooperative activities. A dditionally, we provide preliminary evidence that the greater knowledg e possessed by the management teams may have allowed the new ventures to reduce the costs associated with R&D market transactions. These fin dings are important because they suggest that prior managerial experie nce in similar industries and/or with similar technologies is an impor tant prerequisite for the successful use of R&D cooperative arrangemen ts by new high-technology ventures. Management's knowledge of customer needs, product characteristics, and/or the specific idiosyncracies of the industry and/or technology seems to significantly enhance a new t echnology-intensive venture's ability to effectively engage in R&D coo perative activities.