From Collaboration to Acquisition: The Role of Geographic Distance and Location

Abstract

This paper provides a richer insight on transitional governance trajectories in geographically distant contexts, focusing on the impact of geographic distance and location of alliance partners on the likelihood of a subsequent acquisition. We (i) separate out the effects of geographic distance between the alliance partners and of their geographic locations on the transition likelihood, and (ii) identify different partner-location configurations: domestic (headquarters and alliance units in the same country), fully cross-border (headquarters and alliance units in different countries), operational cross-border (alliance units in different countries) and corporate cross-border ties (headquarters in different countries). Using a sample of 42,909 alliances, our findings show that distance negatively impacts the transition likelihood and is independent on the respective partner-location configuration. We further observe that, accounting for geographic distance effects, domestic and fully cross-border ties have a similar transition likelihood, whereas the transition likelihood is higher for operational than for corporate cross-border ties.