Abstract
We identify the ex ante conditions that incentivize the development of common benefits and private benefits from alliances. Building on transaction costs economics and the knowledge‐based view, we argue that a commitment to exchange know‐how encourages cooperation and is positively related to common benefits, that is, benefits shared by all partners. We also argue that a firm's absorptive capacity and knowledge base relative to its partner reduce reliance on the partner and are positively related to private benefits, that is, benefits enjoyed separately from partners. We test our hypotheses by examining patents, filed separately and jointly by partners in the biopharmaceutical industry in the United States.
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