When birds of a feather don't flock together: Diversity and innovation outcomes in international R&D collaborations

Collaboration is a key to success. Nonetheless, collaboration dynamics are affected by partner compatibility, which, in turn, is strongly affected by team member diversity. Studies on team diversity have shown significant variation in the magnitude, significance, and causal direction of the correlations. We examine how international R&D teams collaborate, investigating the impact of team diversity on innovation. We focus on institutional diversity to analyze how, together with the duration of the collaboration, it affects innovation outcomes. We argue that institutional diversity hampers effective knowledge sharing and negatively affects innovation outcomes. However, this negative effect is mitigated by the duration of the R&D collaboration. The longer the diverse actors collaborate, the more likely they are to overcome the barriers of institutional diversity and find effective modes of collaboration for knowledge transfer and innovation. We test our hypotheses in the context of 3658 clinical trial projects conducted between 2001 and 2015.