Walking the tight rope of coopetition: Impact of competition and cooperation intensities and balance on firm innovation performance

Abstract This study empirically investigates an important question in the coopetition literature: to what extent does coopetition impact a firm's innovation performance? With a focus on the intensity of competition and intensity of cooperation of a focal firm with its alliance partners, our theory proposes that a moderate level of competition with alliance partners is more beneficial than a very high or a very low level of competition. We further develop the concept of “balance” in coopetition and examine how the interplay of competition and cooperation and the balance between the two matter for innovation performance. Results from our empirical study using data from the semiconductor industry show that competition and cooperation intensities have non-monotonic positive relationship with firm's coopetition-based innovation performance. Further, balanced coopetition (i.e., when competition is moderately high and cooperation is high) has a positive effect on innovation performance. A key contribution of this paper is the conceptualization and empirical demonstration of the effects of various aspects of coopetition such as competition dominant, cooperation dominant, and balanced coopetition on innovation performance.