Changing the Geographic Scope of Collaboration: Implications for Product Innovation Novelty and Commercialization

Prior research points out the benefits of external collaboration for innovation, yet little is known of: (a) the changes in the scope of external collaboration over time (i.e., firms increasing, seeking stability, or decreasing the geographic scope of their collaboration), and (b) how such changes in the geographic scope of collaboration affect product innovation novelty and commercialization. Here, we build on organizational learning theory, with the objective of exploring how changes in the geographic scope of collaboration over time affect the novelty of product innovation and its commercial success. Econometric analysis of a large panel of UK firms reveals three novel findings: First, while stability in the geographic scope of collaboration is common, there is a marked incidence of change, that is, firms are increasing or decreasing the geographic scope of collaboration. Second, while moving toward more geographically distant collaboration is beneficial mostly for radical innovation, maintaining stability in the geographic scope of collaboration is particularly beneficial for incremental innovation. Third, we demonstrate that becoming less international in the geographic scope might be beneficial for innovation commercialization. Finally, we identify six pathways to geographic collaboration that map to innovation outcomes.