Inter-firm cooperation and innovation: The role of strategic alliances

The relationship between inter-firm cooperation and downscaling, outsourcing and multiple firm strategic alliances is explored conceptually and with data from innovative firms. Downscaling is related to cooperative outsourcing as a significant influence shaping inter- firm relations. Embedding cooperative outsourcing in interfirm strategic alliances is advantageous, particularly for small and medium-size firms. Network structures within alliances are important to consider, however, since they hold the key not only to the division of labour within an alliance, but also to the longevity of the alliance, cooperation, and the relations of trust that pervade transactions.