An empirical investigation of knowledge management and innovative performance: The case of alliances

This paper examines firm-level performance implications of strategic alliances by employing knowledge management practices as intermediaries. Unlike previous research which focuses on partner firm factors, this study investigates how alliance characteristics (i.e., alliance scope and governance) affect interfirm knowledge sharing and creation, and how these two practices and their interaction in turn affect innovative performance. These questions are examined in a sample of 127 German partnering firms. Results show that joint ventures as opposed to contractual alliances are more effective and influential in facilitating knowledge sharing and creation. In contrast, the scope of alliance activities, while positively associated with knowledge sharing, has no direct relationship with knowledge creation. In addition to these results, the study also finds that knowledge sharing, knowledge creation and their interaction significantly contribute to partner firms’ innovative performance.