Inter-firm Agreements Research Articles

Taking maritime shipping agreements out of the box

ABSTRACT Since its beginnings in the 19th century, the liner shipping industry has shown specific peculiarities characterized by close collaboration between sea carriers. This cooperation has materialized through various types of inter-firm agreements that have been exempted from the key principles of competition law. Recently, strong criticism has emerged against strategic alliances and related agreements that rule a concentrated market where operators are strongly interrelated and increasingly integrated. However, the maritime management literature so far has given little attention to the concrete provisions of these agreements, which still appear as ‘black boxes.’ To fill this gap, we collected 61 enforced cooperative agreements registered with the U.S. Federal Maritime Commission from 1973 to 2020 using a three-way comparison through legal, linguistic, and business lenses of the differences between older and newer types of agreements. We underline the key temporal evolutions of these contracts and show how ocean carriers have incorporated new legal constraints and strategic needs driven by structural market changes toward greater logistics integration.

Проблема коллективного приращения знаний и совместной инновационной деятельности в структуре межфирменных соглашений между соперничающими фирмами (The Problem of Collective Increment of Knowledge and Joint Innovation in the Structure of Interfirm Agreements Between Rival Firms)

Russian Abstract: В стратегических межфирменных соглашениях, основанных на принципах конкурентного соприкосновения сторон, протекают два различных процесса, имеющих непосредственное отношение к передаче, усвоению и практическому использованию нового знания. С одной стороны, компании, вовлеченные в высокотехнологичное сотрудничество, обмениваются важной информацией, чтобы сделать возможным достижение целей стратегического альянса, но при этом не растерять ценные знания, обеспечивающие конкурентное преимущество каждому из игроков. С другой стороны, интересы создания радикальных (прорывных) технологических инноваций в совместном проекте диктуют участникам необходимость рекомбинировать поступающее к ним знание, трансформировать его и совместно порождать новые идеи, технологии и продуктовые решения, призванные увеличить конкурентоспособность всех участников стратегического альянса. English Abstract: In interfirm strategic alliances, which are forged between direct competitors, two kinds of knowledge-related processes take place at the same time. On one hand, parties to interfirm agreements engage in knowledge and information exchange, with an aim to produce incremental innovations, while not relinquishing control over important parts of knowledge underlying their competitive advantage. On the other hand, partners should recombine their intellectual assets and transform the knowledge they receive in order to create radically novel products, processes and technologies, which boost competitive advantage not for single players, but for all parties involved in strategic collaboration.

Doing Good Together: Competition Law and the Political Legitimacy of Interfirm Cooperation

ABSTRACT:Demands have been growing upon firms to take actions in the interests of workers, the environment, local communities, and others. Firms sometimes have felt they could best discharge such responsibilities by cooperating with other firms. This, however, is suspect from the point of view of a purely economic interpretation of competition law, since interfirm agreements may raise prices and thus lower welfare for consumers. Should competition law remain focused on competition enhancing economic welfare, or be reformed to allow for acts of cooperation that are socially beneficial? To answer this question, the article provides a philosophical reevaluation of the deep-seated view that firms are merely private actors. It argues that demands of political legitimacy should also be addressed at firms cooperating together, and that standard views of democratic accountability should be broadened, introducing a model of delegated, sequential decision making which allows regulatory agencies and parliaments to control interfirm agreements.

What more can we learn from R&D alliances? A review and research agenda

R&D cooperation has become a core aspect of the innovation strategy of R&D-performing organisations over the last three decades. Globalization has increased the imperative to organise these cross-border, inter-firm agreements efficiently, and this has led to a cross-fertilisation of ideas from a variety of fields, including international business, management, geography and, more recently, psychology. The aim of this paper is to review and synthesise this literature to identify new directions for research. The breadth of the academic discussion has evolved towards a general consensus on governance choice decisions, motives for collaboration, partner selection decisions and performance implications. Despite having achieved some degree of clarity on these issues, the growing complexity and international nature of these alliances requires a multidisciplinary approach, both in relation to the theories to apply, as well as in the type of data needed.

The rise of inter-firm agreements in the Japanese video game industry

The purpose of this paper is to examine inter-firm agreements between small firms and a large well-established firm, focusing on agreements involving complementary products. The well-documented emergence of the Japanese home video game industry is sourced for stylised facts to contribute to literature about the nature of complementary inter-firm agreements. Findings reveal that these agreements between small firms and a large well-established firm can be truly symbiotic, allowing the small firm to build its own reputation and influence the market. Furthermore, the small firm benefits from the user base and core competency of the large firm through economies of scale, and the large firm benefits from the product variety of the small firms through economies of scope. The managerial implications of this paper offer value to both small and large firms in terms of what to look for and how to benefit from inter-firm relationships based on complementary products.

The rise of inter-firm agreements in the Japanese video game industry

The rise of inter-firm agreements in the Japanese video game industry

Managerś assessment of thin and thick trust: The importance of benevolence in interbank relations

This qualitative interview study investigates managers’ ongoing relationships in inter-organisational banks, examining how they assess trust in their counterparts and how they decide if the relationship should continue. In normal times, formal information can assess thin trust – the ability and integrity of their counterparts. In times of impending crisis, senior bank managers rely on the evaluation of thick personal trust: benevolence. To be a trustworthy party in a financial crisis, benevolence must be established between counterpart banks before the crisis. Benevolence is a redundant component of trust in normal times, but extremely important during a crisis. Lack of benevolence established in normal times may, in fact, be at least partially responsible for the fragility of interfirm agreements and alliances.

Regulating inter-firm agreements: The case of airline codesharing in parallel networks

We compare aviation markets under conditions of competition, codesharing contracts and anti-trust immune alliances, assuming that demand for flights depends on both fares and the level of frequency offered. Using a hybrid competitive/cooperative game theoretic framework, we show that the stronger the inter-airline agreement on overlapping routes, the higher the producer surplus. On the other hand, consumer surplus and overall social welfare are maximized under limited codesharing agreements. Partial mergers appear preferable to no agreement in ‘thin’ markets, in which both demand and profit margins are relatively low. Inter-governmental agreements are also analyzed and we show that bilaterals create the least favorable market outcomes for consumers and producers. Finally, a realistic case study demonstrates that under asymmetric and uncertain demand, codesharing on parallel links may be preferable to competitive outcomes for multiple consumer types.

Networks, Proximities, and Interfirm Knowledge Exchanges

Building on previous literature that provides extensive evidence concerning flows of knowledge generated by interfirm agreements, in this article, we aim to analyze how the occurrence of such collaborations is driven by multidimensional proximity among participants and by their position within firms’ networks. More specifically, we assess how the likelihood that two firms set up a partnership is influenced by their bilateral geographical, technological, organizational, institutional, and social proximity and by their position within networks. Our analysis is based on agreements in the form of joint ventures or strategic alliances, announced over the period 2005–2012, in which at least one partner is localized in Italy. We consider the full range of economic activities, which allows us to offer a general scenario and to investigate specifically the role of technological relatedness across different sectors. The econometric analysis, based on the logistic framework for rare events, provided three noteworthy results. First, all five dimensions of proximity jointly exert a positive and relevant effect in determining the probability of interfirm knowledge exchanges, signaling that they complement each other rather than function as alternative channels. Second, the highest impact on probability is due to technological proximity, followed by organizational, geographical, and institutional proximities, while social proximity has a limited effect. Third, we find evidence concerning the positive role played by networks, through preferential attachment effects, in enhancing the probability of interfirm agreements.

Measuring the scope of inter-firm agreements in the container shipping industry: an empirical assessment

In container shipping industry inter-firm agreements are becoming progressively popular as ship-owners share their slot capacity with commercial partners in order to have fully loaded container ships and reduce financial risk. This manuscript focuses on the cooperative agreements among shipping firms, i.e., vessel sharing and slot charter agreements within consortia and strategic alliances. Through a quantitative approach based on network and OLS regression analysis, we scrutinise the propensity to cooperate, the geographic extent and ‘leveraging effect’ generated by this commercial practise on the container-shipping industry. Results show that carriers, usually regarded as independent, are instead fairly cooperative, especially when involved in trade lanes originating from the Far East. Finally, we show that carriers increase their commercial objectives by leveraging the operated fleet capacity. We conclude with some implications for managers and practitioners as well as a discussion on limitations and future extensions of this study.

Les cartels, une voie vers l'intégration européenne ?

Les années 1920 constituèrent un âge d’or pour les cartels. Certains virent même en eux un moyen pour reconstruire l’économie européenne et résoudre le difficile problème des réparations. Tel fut le cas de Louis Loucheur. Grand patron de l’électricité et des travaux publics, il fut le principal organisateur de la mobilisation industrielle de la France durant la Première Guerre mondiale avec son prédécesseur le socialiste Albert Thomas. S’inspirant de l’action réalisée en Allemagne par Walter Rathenau, il s’entoura d’un brain-trust d’ingénieurs de premier plan, accéléra la rationalisation de l’industrie française et jeta les bases d’une politique pétrolière indépendante. Après la guerre, il joua un rôle déterminant dans la reconstruction du pays. Devenu leader de la gauche républicaine, il milita en faveur du développement des ententes et cartels internationaux. Pour lui, ils constituaient le seul moyen de réconcilier durablement la France et l’Allemagne ainsi que de faire face à la concurrence des États-Unis. Très actif au sein de la Société des Nations, il voyait dans les cartels un moyen prééminent d’aller dans la voie des États-Unis d’Europe.

A strategic needs perspective on operations outsourcing and other inter-firm relationships

Abstract This paper considers two issues: the formation of inter-firm relationships, and the choice of governance form. These have been widely investigated in both the strategic management and operations management fields. This paper contributes to the literature in three ways. First, we address why firms enter inter-firm relationships by hypothesizing that managers enter them to pursue three strategic needs, that is: efficiency/effectiveness, knowledge/learning, and global market access. Our first contribution evidences the relationship between the above strategic needs and a number of operational objectives that managers normally pursue in an inter-firm relationship. Second, we hypothesize how the achievement of the above strategic needs influences the choice of governance form. Third, we compare our framework with the operations management approach to strategic networks by evidencing similarities between the two approaches and showing that managers pursue a similar approach when they face inter-firm agreement issues, whether agreements are supply-chain- or strategy-oriented. We empirically test our framework using secondary data consisting of 95 inter-firm agreements. Our findings largely support the theoretical predictions, and also have important practical implications. First, our results offer managers “practice” suggestions on what kinds of objectives can be pursued together in inter-firm relationships to achieve specific strategic needs, and which governance form is most suitable, depending on the strategic need in question. Second, we consider the strategic reasoning concerning inter-firm relationship management, and some engineering issues, such as time and quality objectives, that, while largely considered in the operations management literature, are often neglected in the strategic management field.

A decision-making perspective on business integration and inter-firms agreements in biotechnology industry

The aim of this paper is to discuss the issue of corporate structure and business models for managing new modular and complementary biotechnology innovations according to a decision-making perspective. Corporate structure and business models of large diversified firms (LDFs) and dedicated biotechnology firms (DBFs), in fact, are at the heart of the scientific research and of the practice in the management field. We focus our attention on the trade-off between vertical integration and inter-firms agreements aimed to control biotech innovation, a trade-off which is related to collaborations’ content, business planning, investment constraints and intellectual capital. DBFs specific features will be presented along with the strategic options developed by operators. The contributions of the transaction cost theory and of the resource-based view will be underlined and, as a consequence, we will elaborate on the fundamental variables for decision making purposes. Data on the US and European integrative strategies trends in the biotech industry will be presented in the conclusive section.

Explaining the Use of the Grant-Back Clause in Technology Licensing

Licensing is one of the most commonly observed inter-firm contractual agreements. Drawing on the resource-based view of the firm and contract economics, we argue that the inclusion of a grant-back ...

La Gestione Strategica Delle Innovazioni Biotecnologiche: Trade-Off Tra Integrazioni Aziendali Ed Accordi Interaziendali

Aim of this paper is to discuss the issue of corporate structure and business models for managing new modular and complementary biotechnology innovations. Corporate structure and business models of Large Diversificated Firms (LDFs) and Dedicated Biotechnology Firms (DBFs). In fact, are at the core of scientific research and practice in the management field. We focus our attention on the trade-off between vertical integration and interfirms agreements aimed to control biotech innovation. A trade-off that is related to collaborations' content, business planning, investments constraints and intellectual capital. DBFs specific features will be presented as well as strategic options developed by operators. The contribution of Transaction Cost and Resource Based Views will be underlined and we therefore elaborate on fundamental variables for decision making and actual scenarios for development strategies combination. Data on US and European relational and integrative strategies trends in biotech industry will be presented in the conclusive section.

Governance forms drivers in bio-pharmaceutical inter-firm relationships

Abstract Since the first theoretical papers on Transaction Cost Economy, several studies have addressed the problem of designing governance forms in inter-firm relationship. Scholars have deeply investigated the problem and several theories have been proposed to face with it. The biopharmaceutical industry is one of the most interesting testbeds for understanding dynamics and rationality of governance forms in IFRs; indeed, in this industry the advent of the biotechnology has not been disruptive as in other industries, so that the newcomers, the biotech companies, and the incumbents, the pharmaceutical ones, have incurred in several types of IFRs such as licensing agreements, non-equity alliances, equity alliances and mergers and acquisitions. Thus, several papers have tried to investigate what kind of drivers influence the choice of the governance form in this industry, but most of them have focused on general characteristics of inter-firm agreements, such as the investment specificity, the number of prior ties, the technology distance and so forth. Differently from other researches, in this paper, we focus on specific characteristics of IFRs in the biopharma industry and we build a theoretical framework consisting of 13 drivers that are able to influence the governance mode of IFRs in this industry. We test our theoretical framework through an explorative empirical analysis. Even if more confirmative empirical analysis is needed, the empirical results evidence the validity of the theoretical framework proposed in this paper and provide some interesting managerial implications.

SMALL WORLD CHARACTERISTICS OF INNOVATIVE SMART CARD NETWORKS

The paper examines the evolving innovative network structure in the smart card industry between 1992 and 2006. The aim is to search for sub-groups within the main network which allowed better understanding of the global innovative network structure and the speed of the smart card innovation system. Based on a proprietary database covering inter-firm agreements in the smart card industry, our empirical results reveal the existence of small-world structures, widely thought to enhance creativity and knowledge diffusion, and the emergence of giant components of innovative networks. Three notable features of this small world structure were the presence of broker incumbents, the decrease of average degree, and the increase of average distance of the networks.

International Alliances and Technology Diffusion: An Analysis of the Global Tire Industry

This paper examines the determinants of international technology agreements in the global tire industry between 1985 and 1996. The empirical investigation combines firm level data on establishment, patenting, and alliance activity with dyad and country specific variables to explain the observed web of partnerships in the industry. My findings indicate that bigger, older, and more diversified firms that possess significant technological capabilities are more likely to provide technology. Smaller and younger firms that exhibit technological and market potential stand a better chance of receiving foreign technologies. Partner similarity in technology and production space, their combined alliance experience, and existing formal ties encourage technology transfers. Differences in terms of patent protection, political democracy and labor standards between recipients and providers' host countries have negative effects on the incidence of inter-firm agreements, while trade barriers increase it.

Dynamics of R&D networked relationships and mergers and acquisitions in the smart card field

This paper analyzes how the structure and the evolution of inter-firm agreements have shaped the development of the smart card industry. The aim is to establish a closer connection between the evolution of inter-firm agreements in the smart card industry and the patterns of change of technology and demand in this new high-tech industry. Based on a proprietary database covering both collaborative agreements and mergers and acquisitions (M&As) occurring in this industry over the period 1992–2006, we find that the evolution of technology and market demand shapes the dynamics of R&D networks and M&As are likely to change the industry structure. We also find that a small group of producers – first-movers – still control the industry and technological trajectories. Their position arises not for oligopolistic reasons of market structure, but for technological and organizational reasons.

Interpreneurial strategic behaviour and business performance

During the 1990s, we have witnessed a proliferation of business networks formed by knowledge-intensive companies with the aim of developing modern technologies (i.e. optoelectronics, semiconductors, biotechnology, nanotechnology, etc.) and launching innovative products to the marketplace. We define interpreneurial networks as inter-firm cooperative agreements between two or more companies in order to develop path-breaking technologies, which in turn, are expected to produce marketable innovative products. Both alliance formation and innovation have been at the core of interpreneurial strategies. This study is an attempt to test the relationship between interpreneurial strategic behaviour and business performance in major biotechnology and life science US and European companies. Results suggest that firm intangible resources like industry experience and research skills acquired over time seem to be key assets for successful product innovation. Moreover, companies pursuing option-like interpreneurial strategies, that is, strategies that imply a slower pace for conducting successive inter-firm agreements and a lower alliance investment commitment, show a better financial performance.