Strategy management alludes to the organizational and environmental factors that shape firms’ propensities to make research and development (R&D) investments. We complement this literature by building on vicarious learning to explain how a firm determines its own R&D investment level based on the R&D investment patterns of partners and competitors. Using panel data on firms publicly traded in China, we show an inverted U-shaped relationship between a firm’s R&D investment pattern and the R&D investment patterns of its partners and competitors. Convergence is driven by imitation and legitimation while divergence is explained by risk perception. We conclude that competitors represent a more valuable reference than partners. Our findings advance research on vicarious learning and the antecedents of R&D investments, underscoring the role of interdependence in influencing firms’ R&D investment decisions.