Balancing Value Creation and Value Capture: the Effects of Intrafirm Collaborations on Firm-university Collaborations

Extant literature highlights the positive impact that collaborations between firms and universities have on external knowledge sourcing. Yet, while acknowledging that firm-university collaborations also can undermine a firm’s ability to protect its knowledge, the literature has stopped short of explaining factors that enable a firm to balance the beneficial impact that such collaborations have on value creation against their potential detrimental effect on value capture. This study argues that the deterrent effects associated with intrafirm collaborations make a firm more likely to form collaboration linkages with a university when the innovative activities of its corresponding R&D unit exhibit a higher degree of intrafirm collaborations. Further, this study argues that collaboration linkages that a university maintains with rival firms exacerbate such influence. Empirical tests using data on co-authorship linkages between researchers affiliated with 189 pharmaceutical firms and scientists affiliated with the top 400 global universities during a 25-year period support these propositions. In contrast with prior research’s emphasis on the beneficial impact that intrafirm collaborations and firm-university collaborations have on value creation, this study focuses on the asymmetric effects that these distinct knowledgesourcing modes have on value capture and shows that intrafirm collaborations can be important enablers of external collaborations.