Dynamics of r&d networked relationships and mergers and acquisitions in the smart card field

Research Policy 38 (2009) 1453–1467

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Research Policy
journal homepage: www.elsevier.com/locate/respol

Dynamics of R&D networked relationships and mergers and acquisitions in the smart card field
Zouhaïer M’Chirgui a,b,∗
a b

Euromed Management, Domaine de Luminy BP921, 13288 Marseille Cedex 9, France GREQAM, University of the Mediterranean, 2,rue de la Charité, 13236 Marseille Cedex 02, France

a r t i c l e

i n f o

a b s t r a c t
This paper analyzes how the structure and the evolution of inter-firm agreements have shaped the development of the smart card industry. The aim is to establish a closer connection between the evolution of inter-firm agreements in the smart card industry and the patterns of change of technology anddemand in this new high-tech industry. Based on a proprietary database covering both collaborative agreements and mergers and acquisitions (M&As) occurring in this industry over the period 1992–2006, we find that the evolution of technology and market demand shapes the dynamics of R&D networks and M&As are likely to change the industry structure. We also find that a small group of producers –first-movers – still control the industry and technological trajectories. Their position arises not for oligopolistic reasons of market structure, but for technological and organizational reasons. © 2009 Elsevier B.V. All rights reserved.

Article history: Received 28 June 2006 Received in revised form 30 June 2009 Accepted 7 July 2009 Available online 18 August 2009 JEL classification: D85 L13 L63 N0Keywords: Inter-firm R&D agreements Mergers and acquisitions Networked oligopoly Smart card industry Dual market structure

1. Introduction In the last three decades, the number of inter-firm agreements has been growing rapidly (Hagedoorn, 2002), particularly in hightechnology fields, as they have proliferated in one industry after another. The smart card industry results from the cross-fertilizationof technologies across several disciplines and, despite its youth, is one of the fields that have been marked by this trend. Over the last decade, the industry has witnessed an increasing number of inter-firm agreements, ranging from alliances to mergers and acquisitions (M&As). There are numerous reasons for these agreements such as joint R&D activities, promotion of standards, implementation ofdesigns, deployment of new applications and penetration of new markets. Recently, the use of inter-firm agreements has been an important means of understanding and examining the most dynamic changes taking place at the intersection of technologies, market structures and boundaries of firms in different industries. The exploitation of databases such as MERIT-CATI, CORE, LAREA/CEREM

∗ Correspondenceaddress: Euromed Managament, Domaine de Luminy BP921, 13288 Marseille Cedex 9, France. Tel.: +33 4 91 82 22 73; fax: +33 4 91 82 77 50. E-mail address: zouhaier.mchirgui@euromed-management.com. 0048-7333/$ – see front matter © 2009 Elsevier B.V. All rights reserved. doi:10.1016/j.respol.2009.07.002

(1988), NCRA-RJV and SDC Platinum has clearly shown the evolution and major trends of thesedifferent organizational forms through extensive empirical studies (Hagedoorn et al., 2000; Hagedoorn, 2002; Caloghirou et al., 2003; De Man and Duysters, 2005; Moskalev and Swensen, 2007). While most of these have studied inter-firm agreements at a dyadic or firm level, few have adopted dynamic analysis; yet in specific industries, such as hightech industries, relationships between firms shape networks ofalliances. Seeing how networks evolve and change over time (Nohria, 1992), as well as examining the overall structure of interfirm relationships (Wellman, 1988) should shed more light on the links between the evolution of inter-firm agreements and the patterns of change in these specific industries. Moreover, the globalization and the intensification of competition in markets around the world,...