Abstract
When a lead firm is undertaking business-model innovation, it invites selected upstream partners in its global value chain (GVC) to its R&D alliance network. We argue that the upstream partner’s network advantages determine its likelihood to join the lead firm’s R&D alliance. Our analysis, based on data about automotive GVC, shows that having current ties increase the likelihood of R&D alliance formation. It further increases when the current ties cover multiple knowledge domains. It is also found that the effect of current ties is positively moderated by the upstream partners’ national institutional distances from the lead firm, but is independent of external ties it has with rival GVCs. Our finding shows an upstream partner can maximise its network advantages as a broker of flows between technological and geographic boundaries.
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