Crossing Borders and Industry Sectors: Behavioral Governance in Strategic Alliances and Product Innovation for Competitive Advantage

Abstract

This paper investigates governance mechanisms in international technology alliances (ITAs), firm-level innovation capabilities, and performance outcomes in the mobile computing market. This high-tech market is characterized by numerous cross-border strategic technology collaborations between software and hardware firms. Anchoring our work in interfirm governance theories and the resource-based view, we develop a model and empirically test relationships related to behavioral governance mechanisms, innovation capabilities, and business performance. In the cross-industry and cross-border context, the empirical model explains to what extent complementary strategic resources, through a relational governance mechanism, contribute to the innovation capabilities of high-tech firms, providing competitive advantage. The data, analyzed using partial least squares (PLS) path modeling, indicates that technological commitment is a factor in expediting technology resource exchange in ITAs between heterogeneous firms. Technological commitment is captured by the extent to which a focal firm commits to investing its technology resources in an ITA to maintain the relationship. The results also show that firm-level performance is only influenced by market development capability, and not new product development capability, in product innovation. However, we did not find any significant moderating effects of firm size and industry type on the model. This paper offers insights into how high-tech firms benefit from interfirm governance in international technology resource exchange arrangements. Furthermore, it provides evidence of the methodological usefulness of PLS path modeling in strategic alliance, capability and performance research.