This paper investigates partnership performance as perceived by individual partners. It taps into one of the most extensive sources of pertinent empirical information recently constructed in Europe. Partnership success is shown to depend significantly on the closeness of the cooperative research to the in‐house R&D effort of the firm, on the firm's effort to learn from the partnership and its partners, and on the absence of problems of knowledge appropriation between partners. Firms use partnerships as vehicles of risk and uncertainty reduction by collaborating with competitors as well as with suppliers and buyers (but not with universities and public research institutes) when the research is far apart from their in‐house R&D and when the expected outcome is not easily appropriable. Copyright © 2003 John Wiley & Sons, Ltd.