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There is manifold literature dealing with co-operative activities of firms. However, no empirical study seems to have investigated the factors leading to malfunctions in co-operation projects in terms of a low likelihood of co-operation, low rate of success, and failed co-operation. Our paper attempts to fill this gap by investigating the possible presence of two problems in co-operation: the lack of intermediation and of reciprocity. Based on data gathered for firms in two German regions and one French region, we find that the success of co-operation projects depends on the perceived importance, rather than on the perceived quality, of intermediate actors. Hence, the major problem for intermediating suitable partners is more related to communication than it is a programmatic issue. Trust and reciprocity in co-operation between firms is found to be relevant ex-post in the sense of being a main determinant of failed co-operation projects. [ABSTRACT FROM AUTHOR]

The aim of this paper is to investigate the role of Knowledge Management (KM)for the innovation success of firms. It is assumed that the functional chains of KM lead to more innovative success via enhancing the recombination of internal and external knowledge assets. To analyse the embedding of KM in a firm's internal system of innovation we establish a structural equation model. We capture KM as latent concept and trace different functional chains by which KM impacts. Using data on KM and innovation success of 351 German firms of the manufacturing sector and knowledge-intensive services located in Thuringia and Hesse, our findings confirm the (dynamic) capability function of KM, which leads via improving exploitation of internal and external innovation assets to more innovation success. [ABSTRACT FROM AUTHOR]