Abstract

That resource constrained ventures gain several advantages from inter-firm collaboration is well established. In particular, they gain access to resources that can help them overcome liabilities of newness and smallness (e.g. Baum et al., 2003). Far less attention, however, has been paid to the potential downsides of collaborative arrangements. In this paper we take a resource-based perspective to examine the pros AND cons of inter-firm collaboration, proposing that collaboration fuels sales growth but hampers product quality and that implications for financial performance are less straightforward than often assumed.

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