Associate Professor Navid Asgari’s Research on Firms Having Collaborative Relationships With Competing Companies Offers Revealing New Insights

Faculty , Graduate | Mar 09, 2026 | Gabelli School of Business

When firms have collaborative relationships with companies that are in competition with each other, it’s common for them to enter into agreements to prevent knowledge leakage. While these types of arrangements are considered standard operating procedure, Navid Asgari, PhD, warns that they have ramifications.

Asgari, who is an associate professor of strategy and technology management, the Grose Family Endowed Chair in Business, and associate director of the Global Healthcare Innovation Management Center at the Gabelli School, explains that alliance partner demands for intellectual firewalls can lead to disconnectedness in a focal firm’s internal collaborative network, inhibiting the recombination of ideas and stifling innovation. In other words, measures designed to prevent knowledge leakage across firms can unintentionally undermine knowledge recombination within firms.

“Firms may like the idea that their alliance partners are competitors, because it gives them more bargaining power,” he asserted. “But they should be aware that if they are forced to erect these walls, it will ultimately undermine their capabilities in creating new value.”

Asgari recently co-authored an article titled “Knowledge Behind Firewalls: How Rivalry Among Alliance Partners Constrains Innovation Inside Firms.” Published in Organization Science, the research examines knowledge-exchange hazards in alliances, offering a method to assess long-term costs in terms of lost opportunities for innovation.

Asgari and his co-authors, Deepak Nayak of Ohio State University, Ram Ranganathan of the University of Texas at Austin, and Vivek Tandon of Temple University, utilized advanced econometrics to perform a large quantitative analysis of patent data and forward citations from pharmaceutical companies to measure the impact that these kinds of firewalls had on innovative output. This approach enabled them to see how often the companies they studied were able to build upon their own patents to generate new ideas. The findings revealed that externally induced disconnectedness compromised firms’ inventive potential by fragmenting their internal knowledge networks.

While industry-leading focal firms may have the leverage to push back on partner demands, smaller companies often feel pressured to accept innovation-limiting terms. “If I’m an unknown company, I will give in to the request to maintain these silos,” Asgari shared, noting that the resulting constraints affect everything from water cooler conversation to formal knowledge-sharing to the freedom to optimize intrafirm organization. “Now my employees cannot collaborate with one another as freely as they could in the past. So, the quality of innovation goes down. We measure that, in terms of forward citations that ideas receive. And we show that the recombination process of the firm—a powerful engine of innovation—is undermined.”

Asgari hopes that the findings will help managers to make better-informed decisions. “Economics is always about trade-offs. For firms to gain something, they have to lose something else,” he said. “I want managers to be aware of the trade-offs and consider all the consequences. Because the part where you get better deals is a short-term benefit with long-term side effects.”

Asgari’s next project will explore what firms can do to mitigate these side effects. He notes that navigating knowledge-leakage agreements may become more challenging as technology evolves. “I think as firms increasingly rely on AI systems that integrate and recombine internal knowledge, the unintended consequences of knowledge silos may become even more severe,” he said.