When rivals collaborate: the effect of resource constraints on intergovernmental collaboration

Collaborative governance literature has increasingly explored why governments collaborate with competitors; however, the influence of external resource constraints remains underexamined. Resource decline intensifies interregional competition, which may inhibit collaboration by raising costs and risks or facilitate it by overcoming resource constraints and achieving increasing returns to scale. To fill this gap, this study uses an instrumental variable approach to investigate the causal effect of external resources on collaboration between rival governments using Chinese provincial party secretaries’ off-site visits as a proxy for collaboration and foreign direct investment as a proxy for external resources. The relevant findings are twofold. First, declining external resources stimulate collaboration between rival governments by enhancing expectations of collaborative benefits. Second, local governments are more likely to collaborate with competitors that have fewer comparative advantages when external resources are declining, indicating that homophily negatively influences government’s collaborative partner selection in competitive contexts. This study contributes to collaborative governance literature by offering a novel perspective regarding how resource constraints reshape competitive dynamics to promote intergovernmental collaboration.