Management Accounting Section Midyear Meeting

Contract Design in R&D Relationships: A Topic Modelling Approach

• In Event: Interfirm Relationships

Abstract

Inter-firm R&D relationships are ubiquitous nowadays and form an important driver for innovation. In this paper, we shed light on the architecture of contracts governing such relationships. Using a correlated topic modelling algorithm, we simultaneously detect and quantify the topical content of a sample of 705 contracts covering various types of inter-firm R&D projects. This results in 60 contractual sub-provisions that we classify under 12 contractual provisions. Our findings show that contracts, on average, devote substantial attention to the operational side of the project – as much as to IPR and confidentiality – and thereby try to stimulate communication and information sharing through various mechanisms. In this way, the contract aims to encourage effective behaviors without overly constraining the R&D process.

Authors

• Tineke Distelmans, Vlerick Business School & KU Leuven

• Martine Cools, KU Leuven

• Isabella Grabner, WU Vienna University of Economics and Business

• Kristof Stouthuysen, Vlerick Business School & KU Leuven

• Alexandra Van den Abbeele, KU Leuven