We theorize that industry conditions of collaboration intensity and innovation intensity drive the development of competence exploitation and exploration in manufacturer-manufacturer collaborations, and that such competencies can be leveraged to increase firm-level new product sales and market share, contingent on the firm’s establishment of non-proprietary knowledge transfer capability. We test our model using a survey of 224 manufacturer-manufacturer collaborations. Our findings indicate that although collaboration intensity drives the development of both competence exploration and exploitation, innovation intensity does not drive the development of either competence. Further, we find that the firm’s non-proprietary knowledge transfer capability dampens the ability of a firm to leverage its competence exploitation into firm-level new product sales and market share, whereas it enhances its ability to leverage its competence exploration into firm-level new product sales and market share.
