Regional expansion of emerging market SMEs: the roles of domestic market environmental uncertainty and international alliance partner diversity

This study develops and tests a framework of the effect of domestic market environmental uncertainty on international alliance partner diversity (IAPD) and the effect of IAPD on small and medium-sized enterprises’ (SMEs’) regional expansion. Leveraging primary data from a sample of 232 Pakistani SMEs, the findings indicate that domestic market dynamism and technological dynamism drive SMEs to engage in IAPD. The analysis further reveals that IAPD improves SMEs’ regional expansion, and particularly so at higher levels of cross-cultural knowledge absorption. The research and practical implications of these findings are discussed.

Balancing risk and trust for strategic alliance formation decisions

PurposeTrust entails the assumption of risk by the trustor to the extent that the trustee may act in a manner unaligned with the trustor's interests. Before a strategic alliance is formed, each firm formulates a subjective assessment regarding whether the other firm will behave in a trustworthy manner and not act opportunistically. To inform this partner analysis and selection process, the authors leverage the concept of value of information to quantify the benefit of information gathering activities on the trustworthiness of a potential trustee.Design/methodology/approachIn this paper, the authors develop a decision model that explicitly operationalizes trust as the subjective probability that a trustee will act in a trustworthy manner. The authors integrate the concept of value of information related to information gathering activities, which would inform a trustor about a trustee's trustworthiness.FindingsTrust inherently involves some degree of risk, and the authors find that there is practical value in carrying out information gathering activities to facilitate the partner analysis process. The authors present a list of trustworthiness indicators, along with a scoring sheet, to facilitate learning more about a potential strategic alliance partner.Originality/valueThe need for a quantitative model that can support risk-based strategic alliance decision-making for partner analysis represents a research gap in the literature. The modeling of strategic alliance partner analysis decisions from a value of information (VOI) perspective adds a contribution to the trust literature.

Intrinsic speed capabilities and alliance partner attractiveness

This study focuses on the role of intrinsic speed capabilities, which refer to the ability to execute investment projects faster than competitors, in the attractiveness and selection of alliance partners. We predict that intrinsically faster firms have a higher likelihood of being selected as alliance partners due to the potential of accelerating the realization of future revenue streams of an alliance project as well as of preempting slower competitors. We also expect that intrinsic speed capabilities substitute for deficiencies in alliance experience and firm innovativeness. Using data on construction projects in the global Liquefied Natural Gas industry, we find empirical support for our theoretical expectations. Our results suggest that firm speed plays an important role in alliance partner selection and has the potential to facilitate the generation of future growth options for firms due to greater partner attractiveness in the market for alliance partners.

The Influence of Institutional Differences on Control Mechanisms in Alliances

Cross-border alliances expose firms to heightened risks, posing different governance and control challenges than domestic alliances. We examine the impact of differences in alliance partner countries' institutional environments. Analysis of survey data supports our contention that cross-border alliances involve a greater reliance on formal controls, particularly when firms collaborate with partners in countries with a weaker institutional environment. These relations exist regardless of governance structure (i.e., equity or nonequity alliance) that prior research considers a critical choice for addressing cross-border alliance risks. Additional analyses show that four sub-dimensions of institutional characteristics (voice and accountability, regulatory quality, rule of law, and control of corruption) and one sub-dimension of formal controls (behavior controls) are the main drivers in the association between institutional distance and reliance on formal controls. These findings demonstrate the distinct impact of institutional environment as a country-level determinant of alliance control choices.

R&D alliance partner attributes and innovation performance: a fuzzy set qualitative comparative analysis

Purpose Drawing upon the importance of research and development (R&D) alliances in driving firm innovation performance, extant research has analyzed individually the impact of R&D alliance partner attributes on firm innovation performance. Despite such analyzes, research has generally underestimated the configurations of partner attributes leading to firm innovation performance. This research gap is interesting to explore, as firms involved in R&D alliances usually face a combination of partner attributes. Moreover, gaining a better understanding of how R&D partner attributes tie into configurations is an issue that is attracting particular interest in coopetition research and alliance literature. This paper aims to obtain a better knowledge of this underrated, but important, aspect of alliances by exploring what configurations of R&D alliance partner attributes lead firms involved in R&D alliances to achieve high innovation performance. To tackle this question, first, this study reviews the extant literature on R&D alliances by relying on the knowledge-based view of alliances to identify the most impactful partner attributes on firms’ innovation performance. This paper then applies a fuzzy set qualitative comparative analysis (fsQCA) to explore the configurations of R&D alliance partner attributes that lead firms involved in R&D alliances to achieve high innovation performance. Design/methodology/approach This study selects 27 R&D alliances formed worldwide in the telecom industry. This paper explores the multiple configurations of partner attributes of these alliances by conducting a fsQCA. Findings The findings of the fsQCA show that the two alternate configurations of partner attributes guided the firms involved in these alliances to achieve high innovation performance: a configuration with extensive partner technological relatedness and coopetition, but no experience; and a configuration with extensive partner experience and competition, but no technological relatedness. Research limitations/implications The research highlights the importance of how partner attributes (i.e. partner technological relatedness, partner competitive overlap, partner experience and partner relative size) tie, with regard to the firms’ access to external knowledge and consequently to their willingness to achieve high innovation performance. Moreover, this paper reveals the beneficial effect of competition on the innovation performance of the firms involved in R&D alliances when some of the other knowledge-based partner attributes are considered. Despite these insights for alliance and coopetition literature, some limitations are to be noted. First, some of the partners’ attributes considered could be further disentangled into sub-partner attributes. Second, other indicators might be used to measure firms’ innovation performance. Third, as anticipated this study applies fsQCA to explore the combinatory effects of partner attributes in the specific context of R&D alliances in the telecom industry worldwide and in a specific time window. This condition may question the extensibility of the results to other industries and times. Practical implications This study also bears two interesting implications for alliance managers. First, the paper suggests that R&D alliance managers need to be aware that potential alliance partners have multiple attributes leading to firm innovation performance. In this regard, partner competitive overlap is particularly important for gaining a better understanding of firm innovation performance. When looking for strategic partners, managers should try to ally with highly competitive enterprises so as to access their more innovative knowledge. Second, the results also highlight that this beneficial effect of coopetition in R&D alliances can be amplified in two ways. On the one hand, when the partners involved in the alliance have not yet developed experience in forming alliances. Partners without previous experience supply ideal stimuli to unlock more knowledge in the alliance because new approaches to access and develop knowledge in the alliance could be explored. On the other hand, this paper detects the situation when the allied partners are developing technologies and products in different areas. When partnering with firms coming from different technological areas, the knowledge diversity that can be leveraged in the alliances could drive alliance managers to generate synergies and economies of scope within the coopetitive alliance. Originality/value Extant research has analyzed individually the impact of R&D alliance partner attributes on firm innovation performance but has concurrently underestimated the configurations of partner attributes leading to firm innovation performance. Therefore, this paper differs from previous studies, as it provides an understanding of the specific configurations of R&D alliance partner attributes leading firms involved in R&D alliances to achieve high innovation performance.

The Selection of Strategic Alliance in IC Packaging and Testing Industry with DEA Resampling Comparative Evaluation

Merger and acquisition (M&A) cases and the speed of horizontal integration have increased rapidly in the integrated circuit (IC) packaging and testing industry. Therefore, cooperation with suitable strategic alliance partner is a vital success factor for enterprises. This study proposes a “comparative evaluation” model that searches out appropriate strategic alliances on the basis of the resampling model acquired via data envelopment analysis (DEA). The realistic public data of 20 companies was collected from 2015 to 2019 in the IC packaging and testing industry. The super slacks-based measure model was used to evaluate the performance before alliance in the period from 2015 to 2019. The resampling past–present–future model was used to forecast the performance in 2020–2024. Afterward, a future strategic alliance for comparative evaluation of efficiency was established. The results of the alliance were divided into the groups “ineffective” and “effective”. The results show that 11 companies in the “effective” group achieved both improvements and 8 companies in the “ineffective” group achieved only unilateral improvements. The comparison model describes the efficiency of both sides simultaneously, not only from the perspective of the target but also from the perspective of the partner company. The evaluation model proposed in the study enables enterprises to find suitable alliance partners.

How the egocentric alliance network impacts firm ambidextrous innovation: a three-way interaction model

PurposeThe purpose of the paper is to advance a framework that can analyze the impact of the egocentric alliance network on firm ambidextrous innovation holistically. On this purpose, the framework involves and integrates structural holes (SH), alliance functional diversity (AFD) and alliance partner geographical diversity (APGD) that measure network characteristics from structural, relational and nodal perspectives, respectively.Design/methodology/approachThe authors collected multi-source matching panel data including alliance deals, technical patents and financial information during 2000–2017 of the 106 top high-tech firms in the computer, communications, electronics and biopharmaceutical industries and conducted a three-way interaction model to uncover the complex mechanisms from a contingency perspective.FindingsEmpirical results show that SH as structural capital is positive to both exploitative and exploratory innovation. Both AFD as relational capital and APGD as cognitive capital positively moderate the SH-exploitative innovation nexus rather than the SH-exploratory innovation nexus. APGD and AFD co-moderate the relationship between SH and firm ambidextrous innovation in the way that when APGD and AFD are both high, SH has the strongest positive impacts on firm exploitative and exploratory innovation.Originality/valueThis research provides new insights into the benefit-cost paradox of the structural brokerage position (SH) by uncovering relational (AFD) and nodal (APGD) network characteristics that impact the trade-off. Also, it contributes to social capital theory by differentiating three dimensions of network capital (structural, relational and cognitive capital) and integrating them into ambidextrous innovation research. Finally, the findings give firms enlightenment to configure their egocentric alliance network for innovation ambidexterity.

Market uncertainty, innovation of firms in alliance and alliance partner characteristics

PurposeWhile prior alliance literature has focused on how firms exploit alliance strategies to enhance performance and innovation, little is known about whether market uncertainty increases, decreases or has no effect on innovation outcomes of firms involved in alliances, and under what conditions these firms promote innovation in an uncertain market through alliances. Relatedly, innovation research has examined the impact of environmental uncertainty on innovation; however, this line of research does not answer the question in the alliance context.Design/methodology/approachUsing data of firms engaged in alliances in the US pharmaceutical and biotechnical industries between 1990 and 2015, the authors examine firms' alliance partner characteristics and innovation outputs in terms of innovation quantity and exploratory innovation.FindingsWe find that market uncertainty hampers innovation quantity and exploratory innovation of firms involved in alliances, because in this environment, relational risks and coordination challenges outweigh the benefits of knowledge sharing from partners. However, the authors find that alliance partners' characteristics such as a different industry and different country origins mitigate the negative effect of market uncertainty on these firms' innovation by offering new business opportunities and enhancing their learning capability.Originality/valueThis study contributes to the alliance literature by addressing a significant question of whether and how market uncertainty matters in the innovation output of firms involved in alliances and how these firms address the environmental challenges and promote innovation. The study also contributes to innovation research by delineating the nature of market uncertainty and its impact on innovation in an alliance context.