The Influence of National Animosity on International R&D Collaborations

Firms lacking innovation capabilities are enticed to seek knowledge in foreign countries. However, international conflicts and intercountry relations may hamper firms’ ability to exchange knowledge across national borders. Accordingly, firms may adjust their international research collaborations (IRCs) because geopolitical tensions can disrupt knowledge flows for firms that have foreign partners. The purpose of this study is to examine how national animosity affects IRCs between firms. We use secondary data covering 11,160 firms in 55 countries over the period 2010-2019 to test whether bilateral conflictual interactions and political divergence reduce the occurrence of IRCs. We find that political divergence decreases IRCs, while the effect of conflictual interactions on IRCs is contingent on the degree of political divergence between the two countries. Our study contributes to the global operations literature by showing the importance of using an intercountry relations perspective to understand how political risk impacts the sharing of knowledge internationally. Furthermore, we suggest strategies that may help practitioners to mitigate government interventions that could target their IRCs after a rise in geopolitical tensions. This paper also has implications for the innovation literature as it highlights the role played by national animosity on firms’ ability to access global knowledge networks.