Abstract: Firms employ different governance structures in strategic alliances depending on the varying levels of contractual risks. However we know little about how such governance structures shape the path through which firms build capabilities. I propose a theoretical model examining the different capability building processes of various governance structures in alliance relationships. I categorize two types of capabilities that are fundamental in cooperative relationships: contract design capability and coordination capability. As firms accumulate collaborative experience from prior alliances, they build these capabilities along different trajectories. These learning paths are further moderated by technological diversity in partners’ prior alliance experiences. This study contributes to the alliance research by analyzing the learning process as embedded in interfirm governance, thus connecting transaction cost economics with the learning perspective.

Abstract: Contracts have traditionally been considered as safeguarding devices against potential opportunism. Researchers have challenged this view and emphasized that contracts have adaptability and coordination functions also. With panel data from the German automotive industry we analyze contracting decisions in supplier-manufacturer alliances. Besides transaction hazards we analyze learning and knowledge management effects on contract decisions. We find that contracts increase in complexity over time. While task interdependence and volatility predict the contractual coordination and adaptability functions, asset specificity shows a more subtle, relation-specific effect on safeguarding. We discuss alternative explanations for the results, and identify future research avenues.

Abstract: In this paper we examine how different dimensions of alliance portfolio diversity (APD) – alliance content diversity and alliance partner diversity –differentially contribute to firms’ market performance. Drawing on the resource based view, organizational learning theory, and transaction costs economics; we develop theoretical arguments about direct and interaction effects of the two APD dimensions and explore value appropriation conditions reflected in firm specific characteristics – focal firm’s absorptive capacity and relative bargaining power. The empirical study introduces a new combined measure of APD as a two-dimensional construct based on vector algebra techniques. We test our hypotheses on a sample of US biopharmaceutical companies from 1995 to 2007. Empirical results partly confirm our theoretical advances.

Abstract: R&D alliances represent a way for firms to pool resources and acquire new innovation capabilities. However, developing a contract to govern an R&D alliance is likely to be difficult in the face of uncertainty, opportunism and complexity. Both transaction cost economics and modern property rights theory suggest that short of total integration, some level of ownership is necessary in an alliance to contend with such hazards, particularly when complementary R&D resources are involved. However, there may be situations where such complementary resources are equally or more valuable if utilized outside of the alliance. Thus, we empirically examine the relationship between complementary resources and ownership, and then turn to an investigation of how this relationship is impacted by the availability of valuable alternatives.