The double-edged sword of coopetition: differential effects of cross-functional coopetition on product and service innovations

Purpose Although coopetition has been studied for decades, most prior studies shed light on interfirm coopetition across firms instead of intrafirm coopetition across functional departments within a firm. To fill the research gaps, this study aims to investigate the differential effects of cross-functional coopetition on both product and service innovations and the moderating roles of environmental turbulence. Design/methodology/approach This study surveyed both senior and middle managers from 149 pharmaceutical firms in China. Findings This study discovers the opposite relationships of cross-functional coopetition on product and service innovations such that cross-functional coopetition enhances product innovation but hurts service innovation. Furthermore, market turbulence attenuates the positive effect on product innovation but strengthens the negative effect on service innovation. However, technological turbulence attenuates the negative impact of cross-functional coopetition on service innovation. Originality/value The effects of cross-functional coopetition have been ignored in the innovation literature. By identifying the double-edged sword of cross-functional coopetition, this study contributes to the literature by providing new insights into the differential effects of cross-functional coopetition on product and service innovations.