Enhancing Value via Cooperation: Firms' Process Benefits From Participation in a Consortium

Firms benefit from participating in a consortium in two ways: from the final products and from the cooperation process. We define the latter as process benefits, which include both inter−organizational learning benefits and social capital benefits. This paper examines the drivers of these two types of process benefits. Based on 232 surveys collected from seven e−business standard consortia, our empirical findings show that firms expect more process benefits if they are more technically capable, value the final output higher, and participate in a better−managed consortium. Among the three, standard valuation is the most influential factor, indicating that the output benefits and process benefits are highly correlated. Surprisingly, within standard consortia, we also find that relational risk does not have a statistically significant impact on process benefits. Published: 2008 URL: http://www.business.uiuc.edu/Working_Papers/papers/08−0109.pdf