Managing cooperative research and development: Partner selection and contract design

This paper explores the influence of partner selection and the design of contracts and agreements on the chances for a collaborative R&D venture to 'succeed'. It is based on questionnaire data regarding 49 such ventures undertaken by companies based in four Nordic countries. The age distribution of the sample is taken into account through use of statistical event history analysis, testing hypotheses regarding the determinants of the hazard rate. The results show that prior contacts with prospective partners improve the chances that a cooperation will succeed. Such contacts help prevent difficulties due to differences in corporate culture, inadequate technical capabilities, incongruous strategic intentions, etc. The analysis also suggests that contracts and agreements should avoid detailed specifications of the procedures to be followed during implementation. Such stipulations create problems by reducing the flexibility required in inherently uncertain R&D collaborations. Granting relative resource self-sufficiency and managerial autonomy to the venture organisation improves its chances of success.