What is the role of institutional factors such as funding, career and evaluation systems in international research collaboration and competition? Which institutional characteristics facilitate international collaboration and competition and which ones hamper these processes? How the ongoing changes in research governance and policy towards increased role of short-term project funding, fixed-term employment and evaluation influence international research collaboration and competition? Drawing on extensive literature review (research policy, sociology of science, science and technology studies) and empirical material (publication, project, organizational and CV data, and interviews with collaborating researchers in Germany, France, Belgium, Netherlands and UK), this paper analyzes how the institutional factors affect dynamics of international collaboration and competition. Analysis reveals that creative and productive processes of international research collaboration and competition are facilitated by institutional factors such as availability of diverse funding sources, support for international mobility and recruitment, and academic freedom.