Controlling Contractual Exchange Risks in R&D-Interfirm-Cooperation: An Empirical Study

Suppliers and buyers of R&D-results perceive two exchange risks: first, the risk to achieve a lower profitability on the innovation return than the exchange partner, second, the risk of the partner becoming a competitor by unplanned, one-sided knowledge flows. Both risks motivate opportunistic behaviour. This paper deals with the reduction of the perceived supplier risks. The contractually guaranteed option on later negotiation of a continuous innovation return sharing is introduced. This option has not been considered as an instrument against exchange risks in theory, yet. The basis for such an option are contractual hostages. An empirical study analyses how effectively contractual hostages lower the perceived risks.