Exchange Hazards and Governance Choices

This chapter explores the challenges of collaborative innovation strategies for firms, focusing on partners’ features and governance choices. The distributed innovation context increases the complexity of cooperation and coordination, posing governance challenges. The analysis considers three levels: the dyad, IORs portfolio, and network, highlighting how governance mechanisms vary in value depending on partner nature, portfolio characteristics, and network structure. Previous research has examined how relational and contractual governance mechanisms interact, affecting performance and exchange hazards in IORs. Exchange hazards, associated with uncertainty and transaction-specific investments, are particularly relevant in collaborative innovation contexts. The conclusion reveals that the value of governance mechanisms differs across levels of analysis, emphasizing the need for firms to develop relational capabilities to explore the complexities of collaborative innovation effectively.