Collaboration for innovation and project failure. A dynamic analysis

The aim of this paper is to investigate the hypothesis that there is a complex and bidirectional relation between collaboration and failure in innovation projects. On the one hand, collaboration in innovative activities may increase the likelihood of project failure. At the same time, the failure in innovation projects may induce the firm to collaborate in order to overcome the problems that determined the failure of innovation projects (induced collaboration). Up to now, we are not aware about the existence of any empirical paper analysing the interaction between these two mechanisms. This paper aims at filling this gap by providing a motivation for the induced collaboration and testing its empirical relevance in a dynamic framework. The empirical analysis is carried out by using two consecutive German Community Innovation Surveys referring to the period 2006–2010. The empirical results support the hypothesis of a bidirectional causal relationship between collaboration and failure.