Alliance Experience Research Articles

Unraveling the effect of alliance experience on alliance formation and alliance governance structure: A meta-analytic approach

Alliance experience plays a crucial role in the stage of alliance formation. However, theoretical gaps and empirical controversies exist in the analyses of its effects on alliance formation and alliance governance structure. Drawing on the method of meta-analysis, we have systematically searched and coded previous empirical studies, generating a database of 91 empirical studies in all. Through classifying alliance experience into general and partner-specific alliance experience, we seek to examine the different effects of these two types of alliance experience on alliance formation and alliance governance structure. We enrich the classification of alliance experience in terms of governance structure to address the disadvantages of this classification in explaining the resulting effects. Our research uses meta-regression to provide evidence about how contextual contingencies affect the alliance experience–alliance governance structure link. JEL Classification: L22, L24

The influence of CEO equity incentives on licensing

In a study of life science firms, we find that, in accordance with predictions drawn from agency theory and behavioral agency theory, CEO stock ownership is negatively associated with licensing while CEO stock options are positively associated with licensing. Furthermore, by combining theoretical insights from the capabilities literature with both agency theory and behavioral agency theory, we predict that a key measure of capabilities in the licensing context—a firm's alliance experience—significantly influences the ways in which CEO equity incentives impact licensing. More specifically, we find that, in accordance with our theoretical predictions, alliance experience positively (negatively) moderates the relationship between CEO stock ownership (CEO stock options) and licensing. Our study contributes to the wider literature on the determinants of licensing by examining whether licensing is sensitive to CEO equity incentives. We also extend the capabilities literature on licensing by examining the contrasting influences of a firm's alliance experience on the relationship between CEO equity incentives and licensing. Our findings also inform behavioral agency-based research on the effects of equity incentives by highlighting the usefulness of a capabilities perspective in augmenting our understanding of the behavioral role of CEO equity incentives.

The influence of alliance experience on acquisition premiums and post-acquisition performance

This paper examines the influence of acquirers' alliance experience on acquisition outcomes. Specifically, we investigate whether or not acquirers with alliance experience pay higher acquisition premiums and achieve improved post-acquisition performance. We also investigate how the impact of acquirers' alliance experience is contingent on the alliance portfolios of target firms. We find that acquirers with alliance experience pay higher premiums to target firms; however, these acquirers do not exhibit any better or worse post-acquisition performance. In addition, we find that the impact of acquirer's alliance experience on acquisition premiums is negatively moderated by target firm's alliance portfolio size or diversity. Finally, we find that the impact of acquirer's alliance experience on post-acquisition performance is positively moderated by target firm's alliance portfolio size. Overall, this study suggests that alliance experience can help acquirers develop organizational knowledge and capabilities, and thus influence acquisition outcomes.

Psychotherapy by alliance and corrective experiences: A possible general model.

Psychotherapy by alliance and corrective experiences: A possible general model.

Does brand partnership create a happy marriage? The role of brand value on brand alliance outcomes of partners

In this paper, we investigate an under-researched issue by examining the financial performances of both partner firms in a brand alliance. We find that a participating firm's brand value and other brand characteristics are associated with not only its own financial performance but also its partner's financial gains from the collaboration. Our results show that the participating firm gains higher stock returns when its partner's brand value is higher. However, brand value differential reduces the positive effect of brand value on the partner firm's financial performance. In addition, the primary partner's brand alliance experience helps increase the positive effect of primary partner's brand value on the stock returns of the secondary partner. The secondary partner's brand exploitation attenuates the positive effect of secondary partner's brand value on the stock returns of the primary brand firm.

Challenges Facing Global Health Networks: The NCD Alliance Experience Comment on "Four Challenges that Global Health Networks Face".

Successful prevention and control of the epidemic of noncommunicable diseases (NCDs) cannot be achieved by the health sector alone: a wide range of organisations from multiple sectors and across government must also be involved. This requires a new, inclusive approach to advocacy and to coordinating, convening and catalysing action across civil society, best achieved by a broad-based network. This comment maps the experience of the NCD Alliance (NCDA) on to Shiffman’s challenges for global health networks – framing (problem definition and positioning), coalition-building and governance – and highlights some further areas overlooked in his analysis.

Divergent Learning Effects from Alliance Experience and Cross-border M&A Entries

Drawing on a learning perspective, we argue that prior alliance experience may have divergent learning effects on subsequent M&A entries into a host country depending on whether the alliances were made as an institutionally embedded choice when regulations restrict foreign M&As or as a strategic choice when regulations encourage foreign M&As. While in the former case, MNCs that had M&A in mind might stretch themselves and learn beyond what alliance relationship offers, whereas in the latter case, MNCs just focus on learning about the particularities of managing alliances. Thus, alliance experience before the change in regulations from restricting to encouraging cross-border M&As in the host country may also change from a positive effect on subsequent M&As to a negative effect. Additionally, we argue that this effect is moderated by economic distance. Analyses based on a sample of 1,561 MNCs from 40 different home countries entering China through M&As over an 11-year period (2003–2013) provide considerable...

When enough is enough: Alliance experience and firm boundaries for technology commercialization

When enough is enough: Alliance experience and firm boundaries for technology commercialization

Alliance governance choices: Disentangling the effects of uncertainty and alliance experience

This article analyses the interaction between alliance experience and behavioural uncertainty to improve our understanding of alliance governance. We investigate the extent to which the effect of alliance experience on governance choices is explained by a reduction in “mundane” transaction costs or by a reduction in “opportunistic” transaction costs. Based on more than 12,000 firm experiences with equity and non-equity alliances, we demonstrate a reduction in mundane transaction costs over time by firms reusing the same governance structure in successive alliances. We also find that in high behavioural uncertainty alliances, firms rely on their experience as a substitute for equity governance to reduce opportunistic transaction costs.

Alliance or Acquisition? A Mechanisms‐Based, Policy‐Capturing Analysis

Research summary: While alliance researchers view prior partner‐specific alliance experience as influencing firms' subsequent alliance or acquisition decisions, empirical evidence on the alliance versus acquisition decision is surprisingly mixed. We offer a reconciliation by proposing and testing an analytical framework that recognizes prior partner‐specific experiences as heterogeneous along three fundamental dimensions: partner‐specific trust, routines, and value certainty. This allows us to use a policy‐capturing methodology to rigorously operationalize and test our mechanism‐level predictions. We find that all three mechanisms can increase the likelihood of a subsequent alliance or acquisition, and in terms of the comparative choice between alliances versus acquisitions, partner‐specific trust pulls towards alliances, and value certainty pulls towards acquisitions. We conclude with a discussion of the theoretical and empirical implications of our approach and method.Managerial summary: This study focuses on an important corporate decision: When a firm has had an alliance with another firm, how would that experience affect the likelihood of a future alliance or acquisition with that same firm? We first suggest that it will depend on three factors: the level of trust that existed in that prior alliance, the extent to which specific work routines were developed, and the degree to which the firm was able to confidently assess the value of the partner firm's resources. We then find that trust is a particularly strong predictor of future alliances, while confidence regarding value more strongly predicts future acquisitions. In this way, we demonstrate more precisely how past corporate choices can affect (consciously or unconsciously) future ones. © 2017 The Authors. Strategic Management Journal Published by John Wiley & Sons Ltd.

An integrated perspective of social exchange theory and transaction cost approach on the antecedents of trust in international joint ventures

This study investigates the antecedents of trust in International Joint Ventures (IJVs). Building on social exchange theory (SET) and transaction cost theory (TCT), we develop an integrated framework in which trust development requires two sets of antecedents: (1) social antecedents (prior alliance experience with partner, partner’s cultural sensitivity and reputation, inter-partner communication, expected longevity of the IJVs), and (2) structural antecedents (interdependence, ownership share, resource complementary). The developed framework is tested using web-survey data collected from 89 IJVs established by Nordic firms in Asia, Europe and America. Empirical data analysis based on structural equation modelling suggests that a partner’s cultural sensitivity and reputation, inter-partner communication, and expected longevity are the social antecedents from SET that enhance trust. From TCA, the structural antecedent of resource complementary develops trust, while balanced interdependence and balanced ownership are unrelated to trust. These findings have important implications for managers planning to form and manage IJVs.

The absorptive capacity as a key success factor in international strategic alliances: a study of Tunisian firms

International strategic alliances (ISAs) are an engine of corporate business development in Tunisia. This research - in accordance with the knowledge-based view - seeks to identify the role of absorptive capacity as a key success factor. In a two-step process, qualitative research was first conducted to centre the research on the characteristics of the Tunisian context. This was followed by quantitative research using a SEM method with data collected from 119 Tunisian firms allied with foreign firms. Results show that alliance experience, and access to the knowledge of the ally, are the most important factors denoting absorptive capacity in this context. Companies engaged in ISAs, with much technological diversity, need to stimulate interest in research and development (R&D) to improve the abilities of their employees and keep them motivated. This leads to an internalisation of knowledge transfer which stimulates business development and leads to successful alliances in terms of effectivness and innovation.

Decreasing Lung Cancer Mortality through Screening—The Lung Cancer Alliance Experience

Over the past several years, detection of lung cancer has changed dramatically due to critical scientific advances, adapting guidelines, and key policy and coverage decisions. Lung Cancer Alliance provides an example of how patient advocacy organizations working alongside of scientists, clinicians, and policy-makers have been influential in shaping science and policy for the benefit of patients.

Cross‐border acquisitions by state‐owned firms: How do legitimacy concerns affect the completion and duration of their acquisitions?

Research summary: Cross‐border acquisitions may raise legitimacy concerns by host‐country stakeholders, affecting the acquisition outcomes of foreign firms. We propose that theorization by local regulatory agencies is a key mechanism that links legitimacy concerns with acquisition outcomes. Given that theorization is time consuming and its outcome is uncertain, we argue that state‐owned foreign firms experience a lower likelihood of acquisition completion and a longer duration for completing a deal than other foreign firms. Moreover, we introduce a set of firm characteristics (target public status, target R&D alliances, and acquirer acquisition and alliance experiences) that may affect the threshold level of legitimacy, thereby altering the proposed relationships. Our framework and findings provide useful implications for institutional theory on its core concept of legitimacy.Managerial summary: Cross‐border acquisitions by state‐owned foreign firms may lead to national security concerns and thus debates and discussions among local regulatory agencies. We argue that such institutional processes may reduce the likelihood of acquisition completion and prolong the duration of acquisition completion. Using cross‐border acquisitions in the United States, we find that acquisitions by state‐owned foreign firms are not less likely to be completed than acquisitions by other foreign firms, but they take more time to be completed. Moreover, state‐owned foreign firms are less likely to complete an acquisition when the target firm has more R&D alliances. However, their acquisition experience and alliance experience in the host country increase the likelihood of acquisition completion, whereas their alliance experience alone shortens the acquisition duration. Copyright © 2016 John Wiley & Sons, Ltd.

Linking alliance portfolios to recombinant innovation: The combined effects of diversity and alliance experience

Innovating firms establish alliance portfolios in hopes of creating recombinant innovation, an outcome of combining new ideas from diverse technological domains. We draw on research in alliances, social networks, and knowledge spillovers to identify the configuration of alliance portfolio that links to recombinant innovation. Our longitudinal analysis of firms in the biotechnology industry shows that the technological diversity of a firm's alliance portfolio has a positive impact on the breadth of recombinant innovation produced by the firm. This relationship is strengthened in the presence of explorative alliance experience, rather than exploitative alliance experience, between the firm and its portfolio partners and among the portfolio partners. However, the positive influence of alliance experience in general diminishes when more than half of portfolio partners have prior ties with the firm. Finally, our licensing revenue data show that the breadth of recombinant innovation is strongly related to the economic value of the innovation. Our findings suggest that innovating firms need to manage the balancing act between sourcing for ideas from unfamiliar domains and leveraging alliance experience in configuring their alliances in aggregate. This study offers new insight into the composition and the collective experience of alliance portfolios, extending our understanding of alliance performance beyond the outcome of bilateral alliances.

Knowledge acquisition and complementary specialization in alliances: The impact of technological overlap and alliance experience

While alliances are widely acknowledged to facilitate knowledge transfers across firms, alliances also allow partnering firms to combine technological capabilities toward joint innovation outcomes through complementary specialization. We examine how technological overlap and alliance experience – widely recognized antecedents of external knowledge utilization – influence the extent of knowledge acquisition and complementary specialization in alliances. Our analyses of 841 two-partner technology alliances within the ICT industry indicate that alliances between firms with moderate-to-high degrees of technological overlap favor high levels of knowledge acquisition across partnering firms while alliances among firms sharing either low or high levels of technological overlap are well-suited for complementary specialization. We further find that partnering firms’ prior experiences with a diverse range of alliance partners strengthen these relationships. Our results also suggest that the likelihood of an alliance to simultaneously exhibit knowledge acquisition and complementary specialization improves as partnering firms’ technological overlap and alliance experience increase.

Alliance portfolio capability

Purpose – The purpose of this paper is to develop a conceptual framework and propositions on a capability-based view that examine the role of a firm’s primary type of alliances, i.e., exploration or exploitation, in the determinants and impact of alliance portfolio capability. Design/methodology/approach – This is a conceptual research paper, which builds on prior conceptual and empirical management research. Findings – Regarding determinants, capability-based arguments indicate that firms with an emphasis on exploration alliances have higher levels of alliance portfolio capability. However, a focus on exploration alliances aggravates the development of alliance portfolio capability through alliance experience and a dedicated alliance function. Regarding impact, alliance portfolio capability may positively affect a firm’s alliance, innovation, and financial performance. While alliance portfolio capability is assumed to have an equally positive effect on alliance performance for all types of alliance portfolios, a relative focus on exploration alliances is expected to limit the positive effects of alliance portfolio capability on innovation and subsequent financial performance. Originality/value – These new conceptual arguments help to reconcile inconsistent earlier findings, and they deepen the understanding of interfirm differences in alliance portfolio capability and performance.

Effect of firm’s diverse experiences on its alliance portfolio diversity: Evidence from India

AbstractThis study examines the effect of diverse experiences on a firm’s alliance portfolio diversity (APD). Drawing on the organizational learning perspective, it argues that a firm’s learning from diverse experiences enables it to reap the benefits and mitigate the risks of high level of APD. Thus, an experienced firm may choose to form or maintain relationships with diverse partners to get the intended benefits of APD. In particular, the study hypothesizes that a focal firm’s product and international diversification experience, alliance experience, and alliance experience heterogeneity are positively associated with its APD. A longitudinal investigation of 90 Indian firms, for the period 2004–2014, provides support for all the hypothesized relationships. In general, findings, which are robust to multiple estimation methods, suggest that a firm’s diverse experiences influence its APD. Findings of this study contribute to the alliance portfolio and organizational learning literature by examining the experiential antecedents of APD.

Understanding the Effects of Plural Marketing Structures on Alliance Performance

A plural alliance structure involving multiple downstream partners has become increasingly popular, yet investigations of marketing alliances continue to address mainly dyadic structures. The authors present learning and dependence balancing as key mechanisms to understand the relative performance differences between plural and dyadic structures, as well as the determinants of effective collaboration in a plural structure. Two complementary studies test the performance of plural and dyadic structures in a wide range of high-tech industries. The analysis of both plural and dyadic structure alliances in an event study shows that plural structures outperform dyadic structures for the upstream firm when marketing alliances extend to product-related tasks, the upstream firm has more alliance experience, or the industry is growing fast; however, dyadic structures perform better when the upstream market is more competitive. A second study, focusing only on plural structure alliances, shows that horizontal relationship factors (i.e., market overlap and prior relationship between downstream partners) interact with the upstream firm's greater alliance experience and reputation to lead to better returns for the upstream firm.

The value for innovation of inter-firm networks and forming alliances: A meta-analytic model of indirect effects

In the past few decades, we have seen strong growth in the number of publications on the role of alliances and networking on innovative performance and, more generally, firm performance. The empirical results of these studies are, however, often debated, and there seems to be little consensus in the academic literature. We therefore focus our meta-analytical model test on the accumulated direction and magnitude of the indirect relationships reported in the literature between innovation, networking, alliances, and firm performance. Our meta-analysis is based on 517 correlations, 156 studies, and a total sample size of 93,048 firms. We compare the findings of our meta-analysis to the results of a bootstrapping analysis. Our results corroborate the bulk of studies, which suggests that networks and alliance experience play an important role in generating rents from innovation resources through both direct and indirect effects. The practical implication is that firms need to engage in networks and also develop strong alliance management capabilities to be able to increase the contribution innovation resources can make to their performance.