Strategic Alliances Theory and Evidence

This book addresses the basic concepts and theories of collaborative strategy.It presents an introduction on the topic of alliance research. This volume goes on to suggest the economics perspectives on alliances as well as how to select the most beneficial alliance. It also presents features a section on real options, an important and emerging feature in the area of strategy. The concluding section introduces relational perspectives of collaborative strategy.

Jeffrey J. Reuer is an Assistant Professor of Strategy and Management at the Fisher College of Business at Ohio State University and is on leave from INSEAD, the European Institute of Business Administration in Fontainebleau, France. He received his Ph.D. in Strategic Management from Purdue University. He serves on the editorial and advisory boards of the Strategic Management Journal and the European Management Journal.

List of Contributors

xi

Introduction: Strategic Alliance Research: Progress and Prospects

Jeffrey J. Reuer

1

(18)

I. OVERVIEW OF RESEARCH ON INTERFIRM COLLABORATION

1. Why Should Firms Cooperate? The Strategy and Economics Basis for Cooperative Ventures

Farok J. Contractor and Peter Lorange

19

(29)

This chapter provides a summary of partnering motives and the benefits of collaboration to firms.

2. Joint Ventures: Theoretical and Empirical Perspectives

Bruce Kogut

48

(21)

This chapter summarizes three theoretical perspectives on joint ventures and also takes stock of the empirical findings on interfirm collaboration.

3. International Joint Ventures

Arvind Parkhe

69

(26)

This chapter provides a literature review that integrates research on international joint ventures.

II. ECONOMIC PERSPECTIVES ON INTERFIRM COLLABORATION

4. A Transaction Costs Theory of Equity Joint Ventures

Jean-François Hennart

95

(21)

This chapter challenges conventional explanations for joint ventures and offers a transaction cost rationale for interfirm collaboration.

5. Information Asymmetry, Adverse Selection, and Joint Ventures: Theory and Evidence

Srinivasan Balakrishnan and Mitchell P. Koza

116

(20)

This chapter suggests that firms may use joint ventures rather than acquisitions when they face valuation problems.

6. The Choice between Mergers/Acquisitions and Joint Ventures: The Case of Japanese Investors in the United States

Jean-François Hennart and Sabine Reddy

136

(18)

This chapter presents an empirical test of the "indigestibility" hypothesis that firms will turn to joint ventures over acquisitions in settings where post-merger integration costs are substantial.

7. Asymmetric Information and Joint Venture Performance: Theory and Evidence for Domestic and International Joint Ventures

Jeffrey J. Reuer and Mitchell P. Koza

154

(15)

This chapter considers alternative economic theories of joint ventures and how they should be judged based on the evidence to date.

III. REAL OPTIONS PERSPECTIVES ON INTERFIRM COLLABORATION

8. Joint Ventures and the Option to Expand and Acquire

Bruce Kogut

169

(20)

This chapter extends real options theory to the setting of interfirm collaboration.

9. Collaborative Ventures and Value of Learning: Integrating the Transaction Cost and Strategic Option Perspectives on the Choice of Market Entry Modes

Tailan Chi and Donald J. McGuire

189

(24)

This chapter develops a stochastic model that integrates transaction cost and real option considerations to demonstrate the value of options to acquire or sell joint ventures.

10. Downside Risk Implications of Multinationality and International Joint Ventures

Jeffrey J. Reuer and Michael J. Leiblein

213

(22)

This chapter examines whether firms are deriving benefits from their joint ventures as predicted by real options theory.

IV. LEARNING PERSPECTIVES ON INTERFIRM COLLABORATION

11. Competition for Competence and Inter-Partner Learning within International Strategic Alliances

Gary Hamel

235

(32)

This chapter considers competition within alliances and the factors associated with the internalization of a partner's skills.

12. The Dynamics of Learning Alliances: Competition, Cooperation, and Relative Scope

Tarun Khanna, Ranjay Gulati, and Nitin Nohria

267

(29)

This chapter relies on models of technology races to depict how firms learn and alter their commitments to alliances over time.

13. Working Abroad, Working with Others: How Firms Learn to Operate International Joint Ventures

Harry G. Barkema, Oded Shenkar, Freek Vermeuleun, and John H.J. Bell

296

(19)

This chapter examines whether firms are able to develop joint venture capabilities through experiential learning.

14. Do Firms Learn to Create Value? The Case of Alliances

Bharat N. Anand and Tarun Khanna

315

(34)

This chapter indicates that experience effects are present for some alliances, but not for others.

V. RELATIONAL PERSPECTIVES ON INTERFIRM COLLABORATION

15. The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage

Jeffrey H. Dyer and Harbir Singh

349

(29)

This chapter explores the implications of firms' capabilities residing outside of their boundaries.

16. Alliances and Networks

Ranjay Gulati

378

(39)

This chapter discusses how a social network perspective on interfirm collaboration differs from the traditional view of alliances as dyadic exchanges.

17. Social Capital, Structural Holes and the Formation of an Industry Network

Gordon Walker, Bruce Kogut, and Weijian Shan

417

(30)

This chapter examines whether the formation of alliances can be explained by social capital or the exploitation of entrepreneurial opportunities.

Index

447

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Strategic Alliances Theory and Evidence

Summary

Author Biography

Table of Contents

Supplemental Materials