Cooperation through Information Trading Cooperation through Information Trading Cooperation through Information Trading

Employees frequently give technical information or advice to colleagues in other firms, including direct competitors. This paper addresses whether this information transfer is in the economic interests of the firms involved. It is hypothesized that employees trade information within the economic interests of their firms. Conditions are discussed in which information trading creates an economic advantage to the participating firms. Data on specific information transfer decisions were obtained from a survey of 294 technically oriented middle-level managers from the U.S. specialty steel and mini-mill industry. The observed pattern of information transfer strongly supports the hypotheses (1) that employees trade information, and (2) that such trading is desirable from a firm's point of view. Furthermore, the data suggest a positive link between the participation of a firm's employees in informal information-transfer networks and the economic performance of the firm. Indeed, it can be in a firm's interest to make its boundaries penetrable for informal information transfer rather than to discourage such transfers. Tyre for their helpful comments and suggestions, and Stephanie Kaylin for her editorial help.