Functioning of co-opetition on the R&D efficiency and productivity growth: An empirical study of Chinese pharmaceutical companies

Co-opetition, constructed by direct competitors and characterized by simultaneous competition and cooperation paradigms, is an emerging strategy mode. Even though this new survival logic has aroused attention both in practice and academic fields, there is still an extreme lack of empirical studies in this area. The focus of this study is to estimate the R&D efficiency and productivity growth in companies participating in co-opetition relationship (also called competitive alliance). Six such companies in pharmaceutical industry in China were identified. Based on the annual reports of these companies, data envelope analysis (DEA) is carried out to explore the function of co-opetition strategy on their R&D efficiency and productivity growth. The results show that more than half of the samples reach efficiency and 66.7 percent of them improve their productivity through cooperating with competitors, which demonstrates that co-opetition strategy can play a significant positive role in improving companies' efficiency and productivity as long as it is properly planned and managed.