for international R&D collaboration among SMEs along the lines of expectation-confirmation theory, an approach developed in marketing in which consumer satisfaction is expressed as a function of expectation and expectancy (dis)confirmation (Oliver, 1977; 1980) (see Figure 2). According to the theory, the degree of satisfaction with an international R&D collaboration should depend on the level of its perceived performance, which can be viewed as a function of perceived benefits and costs (named as a direct path in this study). At the same time, the post-adoption satisfaction is determined by the (dis)confirmation of expectation and perceived performance (named as an indirect path25 in this study). Our analysis models
investigated the relationships between perceived performance and the degree of satisfaction, but the interpretation will be based on both direct and indirect paths for the relationships between the two elements.
Figure 4-2. Analytical model to test the hypotheses (developed in this study)
Next, five hypotheses were developed to understand the benefits and difficulties as proxies for costs experienced during international R&D collaboration along with their impact on the satisfaction felt with such a collaboration. As shown in Figure 1, the main benefits perceived by SMEs can be divided into two types – benefits with regard to technology development and to technology commercialisation. Of the two, SMEs are likely to expect the latter, given their lack of resources for commercialising technology in the global market as argued by previous studies that SMEs’ collaboration needs to emphasise more on the commercialisation stage than the other stages (van de Vrande et al., 2009; Hemert et al., 2013; Theyel, 2013). Therefore, the degree of their satisfaction is likely to increase with the level of benefits they perceived with regard to technology commercialisation. However, if the level of expectation is so high that the perceived performance is less than expected, this expectancy disconformation may decrease the
24 Poppo and Zenger (2002) argued that the degree of satisfaction with collaboration indicates the perceived
effectiveness of the collaboration and thus can be measured by the degree of satisfaction.
degree of satisfaction, an outcome which is quite likely for SMEs engaging in international R&D collaboration; international collaboration has been regarded as a useful means for business globalisation (Glaister and Buckley, 1996; Li and Yue, 2005), and collaboration with suppliers of similar knowledge base, which is likely the case of collaboration among SMEs, was found to be related with market performance (Tranekjer and Søndergaard, 2013), which may raise SMEs’ expectations over much. Accordingly, these two effects will thus tend to cancel each other out.
On the other hand, SMEs pursuing international R&D collaboration are likely to have superior innovation performance to their competitors. Ebersberger and Herstad (2012) found that high performing SMEs in innovation are more inclined to engage broadly in global innovation collaboration, while low performing SMEs focus on internal R&D to strengthen their knowledge resources internally. Hemert et al. (2013) similarly argued that innovative SMEs are more likely to network with other SMEs. Restricting the type of collaboration to the collaboration among SMEs, the firms involved in such collaborations are likely to be innovative, quite naturally obtaining R&D related benefits through collaboration. Then, they are likely to be pleasantly surprised and therefore satisfied with a collaboration that brings technological opportunities such as advancing the SME’s own technologies or introducing new technologies. Consequently, the following hypotheses are put forward:
H1a. The degree of satisfaction with an international R&D collaboration among SMEs increases with the degree of perceived benefits with regard to technology development.
H1b. The degree of satisfaction with an international R&D collaboration among SMEs is not affected by the degree of perceived benefits with regard to technology commercialisation.
In the same way, perceived costs, classified into three categories – production, transaction and management costs – are expected to affect the perceived performance and hence the level of satisfaction; if the costs turn out to be higher, then this, along with the level of perceived costs themselves, may bring dissatisfaction with the collaboration results. Among the three types of costs, the management costs are generally well understood and predictable, but the reduction in production costs and the increase in transaction costs may be more difficult to estimate. More specifically, a reduction in production costs is often a key reason to be involved in international R&D collaboration. Yet a gap between expectations and reality with regard to the size of the reduction is naturally to be expected in the case of collaboration among SMEs having little managerial control (Teece, 1986) and few resources (Alvarez and Barney, 2001), and this will inevitably affect the perceived performance.
Similarly, transaction cost is (initially, at least) a hidden cost. The results of any poor decision- making will not be apparent until the collaboration has been initiated, creating uncertainties caused by internal risks (Das and Teng, 2001; Nooteboom, 2002). The impact of opportunistic behaviour is also hard to recognise until it happens. Thus, the disparity between the expected and the actual transaction costs could be large, which will result in a disconfirmation of beliefs about performance.
On the other hand, the management costs are more predictable and sometimes can turn out to be less than expected, thanks to the advances in communications and transportation technologies. Furthermore, as shown in Figure 1, management costs may be related strongly with the future benefits. SMEs are likely
to learn management skills for further international R&D collaboration and thus may believe that the current costs may turn into future benefits, which may have a positive impact on the level of satisfaction and consequently offset the negative impact of the management costs incurred. The following hypotheses are therefore proposed:
H2a. The degree of satisfaction with international R&D collaboration among SMEs tends to decrease with the degree of perceived difficulties in managing the production costs.
H2b. The degree of satisfaction with international R&D collaboration among SMEs tends to decrease with the degree of perceived difficulties in managing the transaction costs.
H2c. The degree of satisfaction with international R&D collaboration among SMEs is not affected by the degree of perceived difficulties in managing the management costs.