Public-Private and Private-Private Collaboration as Pathways for Socially Beneficial Innovation: Evidence from Antimicrobial Drug Development Tasks

Birgul Arslan, Gurneeta Vasudeva*, Elizabeth B. Hirsch

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)
560 Downloads (Pure)

Abstract

Although public–private collaboration abounds in addressing societal grand challenges, little is known about its performance relative to private-sector collaboration. Drawing from the innovation collaboration literature, and qualitative insights from interviews and contracts, we argue that collaboration risk impairs task performance of public–private versus private–private collaboration. We attribute this to two collaboration risk mechanisms: cooperation problems arising from misaligned social versus economic incentives, and coordination problems due to differences in organizational governance and processes. We test our hypotheses using the development history of 2,496 antimicrobial drugs from 1995–2019. After accounting for endogenous selection into collaboration, we find that public–private collaboration is less effective than private–private collaboration. However, this performance gap reduces for innovation tasks under high technological uncertainty (i.e., in the discovery stage and for developing new drug action mechanisms). To probe the distinctive cooperation and coordination mechanisms, we also examine innovation task efficiency. Findings reveal a wider gap in task effectiveness but not efficiency between public–private and private–private collaboration, suggesting more significant cooperation than coordination problems. Our theoretical and practical insights pertain to whether, when, and how public–private and private–private collaboration offer viable pathways for socially beneficial innovation tasks.

Original languageEnglish
Pages (from-to)554-582
Number of pages29
JournalAcademy of Management Journal
Volume67
Issue number2
DOIs
Publication statusPublished - 2024

Bibliographical note

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Copyright of the Academy of Management, all rights reserved.

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