Do experience effects vary across governance modes? Evidence from new product introduction in the global aerospace industry, 1948–2000

We examine the potential for improved performance through experiential learning of three modes of new product introduction: internal development, joint development, and licensing. Drawing on the organizational learning literature, we argue that the speed of experiential learning—that is to say, the marginal performance benefit of experience—is higher when firms carry out activities that allow for a clearer understanding of cause–effect relationships, whereas experiential benefits plateau at higher levels of experience when firms are in activities involving higher levels of related task variation. We thus predict that both the speed of learning and the experience threshold are higher in internal development than they are in licensing; the speed of learning and experience threshold in joint development fall in between. This means that the potential for improved performance through experiential learning should be greatest with internal development, moderate with joint development, and rather limited in licensing. We study the performance of 278 new aircraft introductions undertaken by 94 firms between 1948 and 2000 and find support for our hypotheses

Governance mode vs. governance fit: Performance implications of make-or-ally choices for product innovation in the worldwide aircraft industry, 1942-2000

We examine the impact of governance mode and governance fit on performance in make-or-ally decisions. We argue that while horizontal collaboration and autonomous governance have direct and countervailing performance implications, the alignment of make-or-ally choices with the focal firm's resource endowment and the activity's resource requirements leads to better performance. Data on the aircraft industry show that relative to aircraft developed autonomously, collaborative aircraft exhibit greater sales but require longer time-to-market. However, governance fit increases unit sales and reduces time-to-market. We contribute to the alliance and economic organization literatures. (Copyright © 2013 John Wiley & Sons, Ltd.