How interfirm collaboration benefits IT innovation

Many studies have observed that close interfirm collaborations have positive effects on a firmʹs innovation. Yet, they have not shown how the collaboration contributes to this process. Higher innovation rates could be a result of revolutionary improvements, evolutionary improvements, or both. We investigated changes in the innovation process. Longitudinal data from 23 top IT firms across 9 years were collected and analyzed. Results suggested that close interfirm collaborations were associated with evolutionary but not revolutionary improvement. Results also suggested that the longer the IT firms had engaged in close interfirm collaboration, the larger the effect on IT innovations.