Abstract
Previous literature indicates that inter-firm alliance has become a common strategy in the high-tech industries. But few have clearly formulated the reasons behind it nor explained its benefits and costs. This paper is thus to theoretically and empirically explore the high-tech industrial structure by employing the theories of transaction costs, asymmetric information, and dynamic change of the life cycles of high-tech firms. The theoretical findings are that due to liquidity constraint and asymmetric information reasons, young, research-intensive firms need to use more alliances to survive in the fast changing high-technology industry. The empirical analysis employs 3 year panel data and finds that the results are consistent with the theoretical predictions.
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