The Role of Procedural and Distributive Fairness in R&D Collaborations

Abstract

This research examines the value of developing procedural and distributive fairness under a variety of favorable and adverse transacting conditions in R&D collaborations. The parties in these collaborations have symmetrical power and make significant investments in joint activities. A survey of approximately 300 R&D collaborations indicates that while procedural and distributive fairness facilitates performance outcomes, these forms of fairness are also able to improve performance under favorable transacting conditions (e.g., knowledge of the transformation process) and mitigate the negative effects of adverse transacting conditions (e.g., asymmetric inputs and transacting hazards). Interestingly, we also find evidence that the development of fairness can undermine performance, particularly when credible commitments of collaboration (e.g., joint transaction-specific investments) are in place. Implications for the development of interorganizational relationships and the management of complex collaborations are also discussed.