Purpose The purpose of this study is to examine how competition with partners affects firms’ R&D investments from the perspective of knowledge acquisition and misappropriation. This study also aims to analyze whether regional intellectual property rights (IPR) protection and firms’ inertia serve as moderating factors in this relationship. Design/methodology/approach Data are collected from Chinese pharmaceutical firms from 2011–2021. Fixed-effects models, two-stage instrumental variable regression and dynamic panel models are used to examine the theoretical hypotheses. Findings The results reveal an inverted U-shaped relationship between competition with partners and focal firms’ R&D investments. Furthermore, this relationship is significantly flattened by regional IPR protection but made steeper by firms’ inertia. Originality/value The study contributes to the literature on three fronts. First, from the perspective of knowledge acquisition and misappropriation, this study highlights the balance between knowledge sharing and protection in competition with partners, offering a nuanced view of knowledge management in coopetition. Second, this study shows that competition with partners has a nonlinear effect on R&D investments but a positive effect on innovation output, providing novel evidence on the input–output distinction. Third, by introducing regional IPR protection and firms’ inertia as moderators, this study identifies key contingent conditions and extend research on coopetition and innovation.
Zhang et al. (Tue,) studied this question.