Abstract
A buyer’s technical knowledge may increase the efficiency of its supplier. Suppliers, however, frequently maintain relationships with additional buyers. Knowledge disclosure then bears the risk of benefiting one’s own rival due to opportunistic knowledge transmission through the common supplier. We show that in one-shot relationships no knowledge disclosure takes place because the supplier has an incentive to transmit and, anticipating that, buyers refuse to disclose any of their knowledge. In repeated relationships knowledge disclosure is stabilized by larger technological proximity between buyers and suppliers and destabilized by the absolute value of the knowledge.
Article PDF
Similar content being viewed by others
Avoid common mistakes on your manuscript.
References
Abreu D.J. (1986). Extremal equilibria of oligopolistic supergames. Journal of Economic Theory 39:191–225
Abreu D.J. (1988). On the theory of infinitely repeated games with discounting. Econometrica 56:383–396
Atallah G. (2003). Information sharing and the stability of cooperation in research joint ventures. Economics of Innovation and New Technology 12:531–554
Baccara M. (2007). Outsourcing, information leakage and consulting firms. Rand Journal of Economics 38:269–289
Baiman S., Rajan M.V. (2002). The role of information and opportunism in the choice of buyer–supplier relationships. Journal of Accounting Research 40:247–278
Bönte W., Keilbach M. (2005). Concubinage or marriage? Informal and formal cooperations for innovation. International Journal of Industrial Organization 23:279–302
Cassiman B., Veugelers R. (2002). R&D cooperation and spillovers: Some empirical evidence from Belgium. American Economic Review 92:1169–1184
D’Aspremont C., Jacquemin A. (1988). Cooperative and noncooperative R&D in duoploy with spillovers. American Economic Review 78:1133–1137
Dyer J.H., Hatch N.W. (2004). Using supplier networks to learn faster. MIT Sloan Management Review 45(3): 57–64
Grindley P., Mowery D., Silverman B. (1994). SEMATECH and collaborative research: Lessons for the design of high technology consortia. Journal of Policy Analysis and Management 13:723–758
Harhoff D., Henkel J., von Hippel E. (2003). Profiting from voluntary information spillovers: How users benefit by freely revealing their innovations. Research Policy 32:1753–1769
Hughes J.S., Kao J.L. (2001). Vertical integration and proprietary information transfers. Journal of Economics and Management Strategy 10:277–299
Ishii A. (2004). Cooperative R&D between vertically related firms with spillovers. International Journal of Industrial Organization 22:1213–1226
Jaffe A. (1986). Technological opportunity and spillovers of R&D: Evidence from firms patents, profits, and market value. American Economic Review 76:984–1001
Kamien M., Muller E., Zang I. (1992). Research joint ventures and R&D cartels. American Economic Review 82:1293–1306
Kamien M., Zang I. (2000). Meet me halfway: Research joint ventures and absorptive capacity. International Journal of Industrial Organization 18:995–1012
Kesteloot K., Veugelers R. (1995). Stable R&D cooperation with spillovers. Journal of Economics and Management Strategy 4: 651–672
Kotabe M., Martin X., Domoto H. (2003). Gaining from vertical partnerships: Knowledge transfer, relationship duration, and supplier performance in the U.S. and Japanese automotive industries. Strategic Management Journal 24:293–316
Lee H.L., Whang S. (2000). Information sharing in a supply chain. International Journal of Technology Management 20:373–387
Lhuillery S. (2006). Voluntary technological disclosure as as efficient knowledge management device: An emprical study. Economics of Innovation and New Technologies 15:465–491
Li L. (2002). Information sharing in a supply chain with horizontal competition. Management Science 48:1196–1212
Milliou C. (2004). Vertical integration and R&D information flow: Is there a need for ‘firewalls’?. International Journal of Industrial Organization 22:25–34
Molto M.J.G., Georgantzis N., Orts V. (2005). Cooperative R&D with endogenous technology differentiation. Journal of Economics and Management Strategy 14:461–476
Sain-Paul, G. (2003). Information sharing and cumulative innovation in business networks. CEPR Discussion Paper 4116.
Veugelers R., Kesteloot K. (1994). On the design of stable joint ventures. European Economic Review 38:1799–1815
Wiethaus L. (2005). Absorptive capacity and connectedness: Why competing firms also adopt identical R&D approaches. International Journal of Industrial Organization 23:467–481
Zhang H. (2002). Vertical information exchange in a supply chain with duopoly retailers. Production and Operations Management 11:531–546
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Bönte, W., Wiethaus, L. Knowledge Disclosure and Transmission in Buyer–Supplier Relationships. Rev Ind Organ 31, 275–288 (2007). https://doi.org/10.1007/s11151-007-9154-8
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11151-007-9154-8