The impact of prestigious top management team on international alliance formation: Evidence from Taiwanese electronics firms

Abstract

AbstractForming strategic alliances with foreign organizations is critical for firms, as it can enable them to access external resources globally. However, because firms, especially those in emerging economies, may possess less legitimacy in foreign countries, potential foreign alliance partners may lack satisfactory organizational information to adequately evaluate them. By applying signaling theory, this study argues that alternative sources, such as the prestige characteristics of the top management team, play an important role in signaling the quality of firms. Additionally, this study expects that the effects of the prestige characteristics of top management teams on the formation of international strategic alliances are lessened when the number of prior international alliances increases. The empirical results support our arguments. Overall, this study contributes by bringing signaling theory into the research of the formation of international strategic alliances.