Cooperation with competitor or not? The strategic choice of a focal firm’s green innovation strategy

Abstract In this paper, we investigate whether and when a focal firm, with either an inferior or a superior brand to its competitor, should cooperate with that competitor to conduct green innovation when facing consumers with green preferences. We incorporate both the principal positive effect on the focal firm (a reduction in RD the brand differentiation gap between the two firms is large, or a large proportion of the R&D cost is borne by the competitor. Otherwise, conducting green innovation alone always dominates. What is more, we find the impact of different brand positioning cannot be ignored when choosing the co-opetition relationship. The findings provide guidance for managers when deciding whether or not to cooperate with competitors on green innovation projects.