infonet-economy

The alliance literature has recognized distance between partners' knowledge as important for innovation. However, theoretical reasoning as well as empirical results differ concerning the relationship of partners' knowledge base distance and innovation performance. We assume that the mixed results are caused by neglecting the role of relevant knowledge types. In this study, we examine the effect of technological and managerial knowledge distance on collaborative innovation performance. We examined 53 collaborative development projects and we find an inverse U-shaped relationship between technological knowledge distance and innovation performance, explained by the knowledge-based view and absorptive capacity. Our results also reveal that a short managerial knowledge distance is beneficial for innovation, which can be explained by transaction cost theory. Overall, our research helps to better explain knowledge distance's effect on collaborative innovation performance.