Abstract
Alliance portfolios are an important source of competitive advantage for firms. Diverse resources of partners contribute to enhancing firms' performance, but relationships among the firms' partners also influence the performance. This paper, employing an embeddedness lens, aims to examine how these relationships influence the firms' innovation performance. We confirm two-sided effects of embeddedness within alliance portfolios. While the focal firms increase the size of their portfolios, dense relationships among their partners increase the performance and competitive relationships weaken the performance. For the empirical test, we collected data on 1863 technology alliances between US biotechnology and multinational pharmaceutical companies. This study highlights how firms have to consider relationships among their partners when configuring their alliance portfolios to maximise innovation performance.
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