Review of Industrial Organization 18: 77–90, 2001.
© 2001 Kluwer Academic Publishers. Printed in the Netherlands.
R&D Cooperation in a Transaction Cost Perspective
LEON A. G. OERLEMANS
and MARIUS T. H. MEEUS
Assistant Professor, Eindhoven Centre for Innovation Studies, Eindhoven University of Technology,
Faculty of Technology Management, P.O. Box 513, Building DG 1.09, NL-5600 MB, Eindhoven,
Abstract. This paper investigates R&D cooperation between buyers and suppliers, drawing both on
transaction cost theory and resource-based theory of the ﬁrm. Results of logistic regression analyses,
using a unique ﬁrm-level database containing 689 manufacturing ﬁrms located in a Dutch region,
support assumptions of transaction cost theory. Frequent knowledge transfer and moderate and high
levels of asset speciﬁcity increase probabilities of R&D cooperation. In particular, Williamson’s
assumptions concerning the moderating inﬂuences of uncertainty on bilateral governance are con-
ﬁrmed. Extending the original transaction cost model with indicators derived from resource based
theory of the ﬁrm increases the performance of the model.
Key words: Logistic regression models, R&D cooperation, transaction cost theory.
Increased intensity of competition on markets for products and enhanced demands
for high quality, fast delivery, and a high degree of customization of products have
brought about important changes in the way industries are organized. Particularly
in the high-tech industries where a single company rarely has the full range of
knowledge or expertise needed for timely and cost-effective product and process
innovation, forging cooperative R&D links with external partners has become an
important strategy. The advantages of these cooperations are compelling: it allows
ﬁrms to share threshold costs in technology, realize economies of scope by improv-
ing utilization of assets with different products, crack new markets, and control
competitive forces (Nooteboom, 1999).
In this empirical paper, an extended transaction cost framework (hereafter:
TCE) is advanced. It performs several functions in organization research. Firstly,
our research model responds to major biases and assumptions of main stream in-
dustrial organization research (hereafter: IO) on R&D cooperation. Secondly, it
Earlier versions of this paper have been presented at a colloquium of the Eindhoven Centre for
Innovation Studies (August 1997) and at the 14th Colloquium (July 1998) of the European Group
on Organizational Studies (EGOS). We thank Geert Duijsters, John Groenewegen, Jerry Hage, Bart
Nooteboom and Bart Verspagen for useful comments, as well as two anonymous referees of this
journal for helpful suggestions. The usual disclaimer applies.