Nooteboom, B., Vanhaverbeke, W.P.M., Duijsters, G.M., Gilsing, V.A., and Oord, A. (2006) examine the relationship between cognitive distance and innovation performance of firms in technology-based alliances. Their key finding confirms the inverted U-shaped effect of cognitive distance on innovation performance. They also find that the positive effect on firms is higher in radical, exploratory alliances than in exploitative ones. The effect of cumulative RD is mixed, potentially increasing absorptive capacity but also reducing the effect of cognitive distance on novelty value. The study suggests that optimal cognitive distance is a balance between absorptive capacity and novelty value. The results show that innovation performance is a parabolic function of cognitive distance, with optimal cognitive distance and performance levels varying depending on the type of alliance. The study also finds that technological capital has a positive effect on both exploitative and explorative learning, though the impact is stronger in explorative learning. The findings highlight the importance of managing cognitive distance to optimize innovation performance in technology-based alliances.Nooteboom, B., Vanhaverbeke, W.P.M., Duijsters, G.M., Gilsing, V.A., and Oord, A. (2006) examine the relationship between cognitive distance and innovation performance of firms in technology-based alliances. Their key finding confirms the inverted U-shaped effect of cognitive distance on innovation performance. They also find that the positive effect on firms is higher in radical, exploratory alliances than in exploitative ones. The effect of cumulative RD is mixed, potentially increasing absorptive capacity but also reducing the effect of cognitive distance on novelty value. The study suggests that optimal cognitive distance is a balance between absorptive capacity and novelty value. The results show that innovation performance is a parabolic function of cognitive distance, with optimal cognitive distance and performance levels varying depending on the type of alliance. The study also finds that technological capital has a positive effect on both exploitative and explorative learning, though the impact is stronger in explorative learning. The findings highlight the importance of managing cognitive distance to optimize innovation performance in technology-based alliances.