An Econometric Analysis of Trends in Joint Venture Activity

Edith Penrose was one of the first scholars to point out that firms may need to rely on research joint ventures (RJVs) to acquire access to resources that can help them achieve and sustain a competitive advantage. We estimate an econometric model of the propensity of firms to disclose their intension to engage in RJVs, in order to explain the recent precipitous decline in RJVs filed with the U.S. Department of Justice. We find that RJV activity is inversely related to the competitive position of U.S. firms in global high-technology industries and that the establishment of the U.S. Commerce Department's Advanced Technology Program (ATP) induced a structural change in the propensity of firms to engage in RJVs. Thus, two factors may explain the recent downturn in RJV filings: a substantial improvement in U.S. global performance in high-technology markets and a sharp decline in ATP funding.