Abstract
In this paper, we investigate the cooperative relationships of innovating firms with (dis)similar partners during the technology life cycle. We test the impact of such cooperative relationships on the innovative and market performance of these firms. To do so, we use a sample of 83 Application Specific Integrated Circuit firms over the period 1986-2005. We find that working with partners that are technologically similar improves innovative and market performance early on in the technology life cycle. Working with partners that are technologically dissimilar improves innovative and market performance later on in the technology life cycle. These results indicate that innovating firms have to change their partnership from technologically similar towards technologically dissimilar over the technology life cycle.