Managing Knowledge Distance: IT-Enabled Inter-Firm Knowledge Capabilities in Collaborative Innovation

Collaborating with a partner in a distant area is widely endorsed in practice as a means for inspiring novel innovations. However, empirical evidence also reports significant innovation efficiency challenges when working with distant partners due to differences in technical knowledge domain differences. In this study, we conducted a multi-method approach by using a case study of 30 interviews to develop three information technology (IT)-enabled inter-firm knowledge capabilities and testing the research model with field survey data from 258 firms. The findings of this research confirm our hypotheses that IT-enabled inter-firm knowledge exploration capability and IT-enabled inter-firm knowledge exploitation capability can help embrace the benefits of product effectiveness while IT-enabled social integration capability surmount process efficiency challenges inherent in collaboration with distant partners. This study adds a much-needed perspective to the IT and innovation literature and offers practical suggestions for firm managers to mindfully design and deploy IT resources in collaborative innovation projects.