Knowledge-partitioning and inter-firm innovation: an empirical case analysis

Building on emerging research on knowledge partitioning and an information processing view of product development, this study examines the impact of task uncertainty on the knowledge boundary between manufacturers and suppliers in automobile industry. Using successfully applied patents in automobile emission control technologies from 1970 to 1998, this research shows that manufacturers expand their in-house R&D capabilities beyond architectural knowledge and into component innovation whenever they encountered task uncertainties. Moreover, and unlike what was anticipated, manufacturers' endeavor in building up in-house component innovation was shown to increase over time, indicating a growing importance of component knowledge for manufacturers in times of task uncertainties, even after the establishment of dominant designs. This study also provides a large scale empirical test for the theoretical claims that effective knowledge management for both architectural and component knowledge is a key factor influencing firms' competitiveness in the inter-firm product developments.