agricultural economics challenges to the profession anniversaries whether related to age marital status or the life of an organization are highly arbitrary anniversaries merely serve to accentuate the obvious and to create benchmarks in the continuum of life the fact that the american agricultural economics association is approaching its seventy fifth year might not merit more than passing comment except that agricultural economics may be moving into the most important and possibly the most turbulent period in the history of the profession the work done by agricultural economists and the decisions made within the profession in the next few years promise to be extraordinarily influential not only in terms of the future of agricultural economics but in terms of the welfare of the entire human family

sealed bids sunk costs and the process of competition how do firms recover precontract costs for example suppose 10 firms compete in a sealed bid auction for the right to explore and develop an offshore oil field each spends 500 000 to estimate the value of the field and to prepare its bid suppose this investigation reveals that the tract is worth approximately 20 million if sunk costs do not matter competition dictates that the winner must bid 20 million but if the winner is to recover its prebid costs the maximum offer can be only 19 5 million furthermore long run industry equilibrium considerations suggest that the highest bid will be only 15 million 20 million minus the total bid preparation costs of 5 million if competition forces firms to charge marginal cost why do firms ever invest in resources which become sunk in some industries inframarginal rents can be used to recover these costs however the example above as well as many others involves an all or none deci

balancing exploration and exploitation in alliance formation do firms balance exploration and exploitation in their alliance formation decisions and if so why and how we argue that absorptive capacity and organizational inertia impose conflicting pressure

optimal management of an r d budget abstract this paper characterizes the optimal allocation of a budget between several stages of an r d project when intermediate stages are profitable the optimal allocation involves greater expenditures in early stages increasing the budget does not necessarily increase expenditures in every stage but does increase the budget that remains unspent at each stage a simple necessary and sufficient condition is given for the optimality of bold play the spending of all remaining budget on the current stage if profits are realized only after all stages are successfully completed decreasing returns in the innovation production function implies that the optimal strategy is to spread the budget evenly between the stages of the r d project

equilibrium in auctions with entry the authors model entry incentives in auctions with risk neutral bidders and characterize a symmetric equilibrium in which the number of entrants is stochastic the presence of too many potential bidders raises coordination costs that detract from welfare the authors show that the seller and society can benefit from policies that reduce market thickness i e the relative abundance of buyers their analysis extends well known revenue equivalence and ranking theorems but also demonstrates that variations in the auction environment affect optimal policies e g reservation prices in ways not anticipated by models that ignore entry copyright 1994 by american economic association

understanding corporate coherence theory and evidence abstract multiproduct firms are perceived to be coherent in their scope yet there is no strong theoretical foundations to explain coherence in modern industrial organization theory this paper shows that as u s manufacturing firms grow more diverse they maintain a constant level of coherence between neighboring activities this finding runs counter to the idea that firms with many activities are generally more incoherent a framework is then presented which appeals to the nature of enterprise learning path dependencies and the nature of the selection environment to explain the ubiquity of coherent diversifiers

are green brides more attractive an empirical examination of how prospective partners environmental reputation affects the trust based mechanism in alliance formation there is theoretical and empirical evidence that firms environmental performance has ramifications for their appeal to various stakeholders yet we know little about how this plays out in the context of strategic alliance formation stated differently research is lacking on how green prospective alliance partners are estimated by the initiating firm this article employs strong environmental reputation as a proxy for high environmental performance and explores implications for the well established alliance formation trust based mechanism under the strategic cognition perspective the ensuing hypotheses are subjected to empirical scrutiny through an experimental method a random sample of 138 ceos and top managers of norwegian manufacturing firms completed a scenario based questionnaire the results show that two out of three trust dimensions are affected and moreover that two out of three but not the same trust dimensions influence partner attractiveness several theoretical and managerial implications and future research opportunities are derived from the findings

an empirical investigation of the process of knowledge transfer in international strategic alliances this research proposes and tests a basic model of organizational learning that captures the process of knowledge transfer in international strategic alliances based on a cross sectional sample of 147 multinationals and a structural equation methodology this study empirically investigates the simultaneous effects of learning intent learning capacity lc knowledge ambiguity and its two key antecedents tacitness and partner protectiveness on technological knowledge transfer in the interest of expanding our understanding of the organizational mechanisms that both hinder and facilitate learning the concept of lc is refined into three distinct components resource incentive and cognitive based lc further the strength of the relationships between these theoretical constructs and knowledge transfer is examined in light of the possible moderating effects of organizational culture firm size and the form and competitive regime of the alliance consistently learning intent as a driver and knowledge ambiguity as an impediment emerge as the most significant determinants of knowledge transfer moreover the effects of partner protectiveness and lc on the learning outcome are moderated by the firm s own culture towards learning the size of the firm the structural form of the alliance and the fact that partners may or may not be competitors

optimal allocation of ownership rights in dynamic r d alliances we explore the dynamic evolution of property rights regimes in r d alliances using the incomplete contract approach pioneered by grossman hart and moore in contrast to the standard analysis the productive asset is an excludable public good such as a patent moreover both firms can decide whether to disclose their know how and invest effort know how that has once been released cannot be concealed later we characterize different scenarios in which the optimal ownership structure may change over time due to a trade off between inducing know how disclosure and ensuring maximum effort

assets and actions firm specific factors in the internationalization of u s internet firms by providing a nearly instant connection among parties at opposite corners of the world and enabling a variety of commercial exchanges the internet emerged as the technology expected to create a truly global market space internet firms faced the challenge of capitalizing on this development in this paper we examine what firm specific factors are associated with the propensity of pure u s based internet firms to enhance their international presence on the internet by developing country specific websites despite the assertion that all internet firms are born global our findings show that the pursuit of internationalization by internet firms is related to the levels of their intangible assets and strategic activity two types of intangible assets reputation and website traffic are positively related to the degree of internationalization so are the levels of competitive and cooperative activity and the interaction effects between reputation and competitive and cooperative activity these findings suggest that ideas from both resource based theory and research on competitive dynamics can contribute to understanding the internationalization of internet firms

the economic modeling of strategy process clean models and dirty hands we argue that our model of learning in alliances khanna gulati and nohria 1998 is an economic model of strategy process we discuss implications of this view for the strategy process vs content debate for the appropriate testing of models of strategy process and for the role of economics in helping understand strategy process we propose that the clean models from economics and dirty hands of traditional process inquiries offer research designs that are complementary rather than incompatible hirsch michaels and friedman 1987 copyright 2000 john wiley sons ltd

technological joint venture formation under the real options approach abstract technological joint ventures as powerful mechanisms to attain innovation have become commonplace firms form tjvs in an effort to access future technological opportunities without losing flexibility in uncertain contexts the real options approach allows the essence of such managerial thinking to be captured although research in this line remains scarce drawing on the real options approach and using an eight year panel of 4050 spanish manufacturing firms we examine under which conditions firms form technological joint ventures we find that a firm s propensity to form technological joint ventures is positively related to its absorptive capacity and to the degree of environmental technological uncertainty and negatively related to the risk of pre emption by rivals and the existence of opportunity costs our study contributes to bridging the gap between finance theory and strategic analysis in addition it shows practitioners the applicability of the real options approach for decision making results suggest that public policies should particularly although not exclusively foster participation of young and small firms in technological joint ventures we also suggest using managerial perceptions as a guide for channeling public grants

do venture capital firms benefit from international syndicates this paper examines the benefits of syndicating with foreign venture capital vc firms for domestic vc firms in emerging markets we find that the vc firms that are domestic to their invested companies and previously syndicated with foreign partners invest proportionately more frequently in riskier ventures after gaining syndication experience with foreign vc firms a larger number of their portfolio companies are successfully exited thereby suggesting improved performance we hypothesize that this outcome is due to the organizational learning effects while the previous research has shown benefits for foreign vc firms our results show that domestic vc firms also benefit from international syndication through improved investments

from hybrids to hierarchies shareholder wealth effects of joint venture partner buyouts this study examines the parent firm performance implications of joint venture jv partner buyouts which involve the conversion of a hybrid governance structure to an internal unit within the firm s hierarchy transaction cost theory as developed and applied in the international literature and market entry research is extended to the post entry investment setting to isolate sources of value creation or dissipation from the governance changes effected by jv partner buyouts the evidence complements recent research on jv longevity and its determinants copyright 2001 john wiley sons ltd

asset stock accumulation and sustainability of competitive advantage given incomplete factor markets appropriate time paths of flow variables must be chosen to build required stocks of assets that is critical resources are accumulated rather than acquired in strategic factor markets barney barney j 1986 strategic factor markets expectations luck and business strategy management sci october 1231 1241 sustainability of a firm s asset position hinges on how easily assets can be substituted or imitated imitability is linked to the characteristics of the asset accumulation process time compression diseconomies asset mass efficiencies inter connectedness asset erosion and causal ambiguity

how do competitive pressures affect incentives to innovate when there is a market for inventions competition and intellectual property ip protections are complements in stimulating innovation when ip is appropriable a market for inventions forms and competitive pressures increase incentives to innovate competition among producers the demand side of the market for inventions and competition among inventors the supply side of the market for inventions create incentives to innovate when ip is not fully appropriable markets for inventions are limited and competitive pressures can decrease incentives to innovate firms vertically integrate r d and production and share technology to appropriate the returns to ip this implies that antitrust policy and ip protections are complements

termination outcomes of research alliances abstract we draw upon evolutionary economics and transaction cost economics to examine how alliance experience accumulation at the parent firm level and alliance features at the transaction level jointly and interactively shape the favorability of research alliances termination outcomes fifteen percent of the terminated alliances we examined were successful 34 were failures and 51 experienced an intermediate outcome in the form of contract expiration or unilateral withdrawal by a partner we find that the effect of partner specific experience on the favorability of termination outcomes is greater for non equity alliances than for equity structures affording stronger formal governance mechanisms other forms of experience such as general alliance experience or prior alliances in the same technological area as the focal agreement have no such favorable consequences for alliance termination the findings also indicate that alliance complexity adversely influences firms termination outcomes in alliances we therefore find evidence in partial support of both evolutionary and transaction cost based arguments for the explanation of termination outcomes in research alliances

racing with uncertainty and strategic interaction between competitors as the race unfolds most of the existing literature examines one or other of these features but not the two combined our aim is to see how the efforts of competitors in a race vary with the intensity of rivalry between them in our principal model whch is of a one dimensional race it is shown that the leader in the race makes greater efforts than the follower and efforts increase as the gap between competitors decreases under certain conditions the same results hold in our second related model which is of a two dimensional race

competitive consequences of interfirm collaboration how joint ventures shape industry profitability recent international business research on international joint ventures focuses on how firms can use such ventures for knowledge access and learning to enhance their competitiveness thereby increasing competition in the industry by contrast research in industrial organization economics has observed that firms can also use joint ventures in various ways to attenuate competition in this paper we join these two streams of research to investigate the conditions under which joint ventures reduce or enhance competition by empirically testing the effects of different types of joint ventures on industry profitability our results suggest that joint ventures can be pro competitive or anti competitive depending on whether or not they are formed between competing firms represent foreign market entry and operate in relatively concentrated industries our paper shows the importance of adopting a contingent approach to evaluating the competitive implications of joint ventures and it also points to the value of reinvigorating international business research on the competitive context and consequences of interfirm collaboration

identification in auctions with selective entry this paper considers nonparametric identification of a two stage entry and bidding game we call the affiliated signal as model this model assumes that potential bidders have private values observe signals of their values prior to entry and then choose whether to undertake a costly entry process but imposes only minimal structure on the relationship between signals and values it thereby nests a wide range of entry processes including in particular the samuelson 1985 and levin and smith 1994 models as special cases working within the as model we map variation in factors affecting entry behavior potential competition or entry costs into identified bounds on model fundamentals these bounds are constructive collapse to point identification when available entry variation is continuous and can readily be refined to produce the pointwise sharp identified set we then extend our core results to accommodate nonseparable unobserved auction level heterogeneity and potential endogeneity of entry shifters thereby establishing a formal identification framework for structural analysis of auctions with selective entry

firm scope experience historic multimarket contact with partners centrality and the relationship between structural holes and performance this study investigates characteristics that affect the relationship between firms positions in a network of collaborative ties with other firms and their performance firms located in similarly structured networks rich in structural holes may obtain different performance results depending on their 1 capacity to absorb heterogeneous information 2 ability to protect against partner noncooperation and 3 bargaining power in this paper i argue that firms with a wide scope of experience have superior absorptive capacity for dealing with heterogeneous information hence such firms will be able to extract performance improvements from network positions rich in structural holes furthermore firms with a high level of historic multimarket contact mmc with their partners are able to reduce the risks of partner noncooperation hence augmenting their performance compared to firms in open networks that do not enjoy mmc with their own partners finally firms of low centrality in the industry s network of alliances will extract performance benefits from enhancing bargaining power as a result of exploiting brokerage opportunities in open networks these arguments are corroborated in a study of relationships formed among investment banks advising on the merger and acquisition transactions in the united kingdom between 1992 and 2001

interorganizational alliances and the performance of firms a study of growth and innovation rates in a high technology industry this paper investigates the relationship between intercorporate technology alliances and firm performance it argues that alliances are access relationships and therefore that the advantages which a focal firm derives from a portfolio of strategic coalitions depend upon the resource profiles of its alliance partners in particular large firms and those that possess leading edge technological resources are posited to be the most valuable associates the paper also argues that alliances are both pathways for the exchange of resources and signals that convey social status and recognition particularly when one of the firms in an alliance is a young or small organization or more generally an organization of equivocal quality alliances can act as endorsements they build public confidence in the value of an organization s products and services and thereby facilitate the firm s efforts to attract customers and other corporate partners the findings from models of sales growth and innovation rates in a large sample of semiconductor producers confirm that organizations with large and innovative alliance partners perform better than otherwise comparable firms that lack such partners consistent with the status transfer arguments the findings also demonstrate that young and small firms benefit more from large and innovative strategic alliance partners than do old and large organizations copyright 2000 john wiley sons ltd

trust across borders we make the case for fresh approaches to examine the role of trust in international collaborations based on the idea that not only do the levels of trust differ across international borders but also both the nature of trust and the institutional and cultural support for trust can vary across different national contexts collaboration partners from different countries are therefore likely to bring either symmetric or asymmetric conceptions of trust to the business relationship we develop a model and propositions linking symmetry and asymmetry in the institutional and cultural support for trust in international collaborations with the degree of partner interdependence and identify implications for governance and trust building investments we conclude with some suggestions for research that incorporates trust asymmetries between partners

the alternative funding of agricultural economics research the experience of the past decade and challenge to the profession christensen and robinson carefully document the relative decline in federal funding support for economics research in the state agricultural experiment stations saes within the category of federal funding they note the sharp erosion of support from csrs sources relative to that provided by usda cooperative grants and agreements and by allocations from other federal non usda agencies the obvious implication is that alternative nonfederal sources have become of increasing importance to the funding of economics research programs in saes institutions the central question is whether the relative shifts in funding sources might have an impact on the research contributions of individuals and departments and if so might the impact be for the better or for the worse it is unlikely that there is a generalizable valid response to the query yet it may justly deserve our serious consideration for it is not difficult to accept the general notion that shifting sources of research support are likely to have exerted incremental changes in research agendas and in the kind of research that is now supportable in departments of agricultural economics in the mid 1980s and should the trends continue the forces in motion might seriously influence how we go about meeting the substantive research challenges of the 1990s this paper seeks to establish some albeit a quite limited basis for further discussion by examining selected aspects of recent changes in support for economics research and by providing initial comments on alternative funding opportunities and on challenges for agricultural economists and for programs of agricultural economics research changes in economics research funding 1971 73 to 1981 83

a note on the dynamics of learning alliances competition cooperation and relative scope khanna gulati and nohria 1998 examine the dynamics of alliance learning and develop a conceptual framework designed to capture the tension between cooperation and competition based on the concepts of private and common benefits and relative scope the authors explore firms learning behavior patterns this note comments on the framework and suggests that although the framework introduces some interesting concepts the reliance on simple models from economic theory leaves the framework somewhat disconnected from the process of alliance management copyright 2000 john wiley sons ltd

costly signalling in auctions this paper analyses a dynamic auction in which a fraction of each bid is sunk jump bidding is used by bidders to signal their private information bluffing respectively sandbagging occurs when a weak respectively strong player seeks to deceive his opponent into thinking that he is strong respectively weak a player with a moderate valuation bluffs by making a high bid and drops out if his bluff is called a player with a high valuation should vary his bids and should sometimes sandbag by bidding low to induce lower bids by his rival

organizational inertia and momentum a dynamic model of strategic change this study provides an empirical test of hannan and freeman s theory of structural inertia we examined the changes organizations undertook in response to a major environmental change in addition

entry and competition in takeover auctions abstract we estimate the degree of uncertainty faced by potential bidders in takeover auctions and quantify how it affects prices in auctions and negotiations the high degree of uncertainty revealed by our structural estimation encourages entry in auctions but reduces a target s bargaining power in negotiations in the aggregate auctions and negotiations produce similar prices even though auctions are preferred in takeover markets with high uncertainty while the reverse is true for negotiations firm characteristics predict pre entry uncertainty and thus are informative about the relative performance of auctions and negotiations for individual targets

the embeddedness of networks institutions structural holes and innovativeness in the fuel cell industry plentiful research suggests that embeddedness in alliance networks influences firms innovativeness this research however has mostly overlooked the fact that interorganizational ties are themselves embedded within larger institutional contexts that can shape the effects of networks on organizational outcomes we address this gap in the literature by arguing that national institutions affect the extent to which specific network positions such as brokerage influence innovation we explore this idea in the context of corporatism which fosters an institutional logic of collaboration that influences the broker s ability to manage its partnerships and recombine the knowledge residing in its network as well as the extent of knowledge flows among network participants we argue that differences in institutional logics lead brokerage positions to exert different effects on firm innovativeness we propose that the firm spanning structural holes obtains the greatest innovation benefits when the firm the broker or its alliance partners are based in highly corporatist countries or under certain combinations of broker and partner corporatism we find support for these ideas through a longitudinal study of cross border fuel cell technology alliance networks involving 109 firms from nine countries between 1981 and 2001

how much do your co opetitors capabilities matter in the face of technological change firms often lose their competitive advantage when a technological change renders their existing capabilities obsolete an important question that has received little or no attention is what happens to these firms competitive advantage when the technological change instead renders obsolete the capabilities of their co opetitors the suppliers customers and complementors whose very success may underpin that of the firm and with whom it must collaborate and compete this paper explores the effects on a firm of the impact of a technological change on its co opetitors it argues that a firm s post technological change performance decreases with the extent to which the technological change renders co opetitors capabilities obsolete it uses detailed data on the adoption of risc reduced instruction set computer technology by computer workstation makers to demonstrate the need to view resources as residing in a network and not in the firm alone copyright 2000 john wiley sons ltd

clusters entrepreneurial ecosystem co creation and appropriability a conceptual framework extant literature on clusters underplays the role of entrepreneurs and entrepreneurial management in creating and co creating organizations markets and supporting ecosystems we employ transaction costs resource knowledge capabilities and power control based theories to provide a comparative static governance based perspective on clusters we embed this into a more general co evolutionary entrepreneurial theory of the emergence evolution and co evolution of markets ecosystems and clusters we suggest that clusters can involve advantages that help engender superior appropriation of co created value as compared to alternatives entrepreneurial managers faced with a degree of choice will help co create clusters and be part of them for as long as they can appropriate more value in this way than through alternatives

ex ante efficient mechanism with private entry costs this paper studies ex ante efficient resource allocation mechanism in an environment where agents endowed with their private values must incur private entry costs to participate due to the nature of this bidimensional screening problem and the difficulty in fully characterizing all implementable endogenous entries the domain of the related social planner s problem that is essential for establishing the existence of efficient mechanism needs to be carefully designed we find that a second price auction among the entrants with a reserve price equal to the seller s valuation is ex ante efficient and any ex ante efficient mechanism must be ex post efficient jel d44 d61 d82

the stability of joint ventures reciprocity and competitive rivalry the focus of the following empirical analysis is the influence of reciprocity and long term relationships on the stability of joint ventures these cooperative incentives are offset by industry structural conditions which may promote competitive rivalry among the partners to separate these effects on joint venture survival the hypothesized relationships are proxied by variables drawn from industry and questionnaire data and estimated under a hazard model specification a theoretical implication of the findings is to suggest a shift of attention from the transaction to the economic relationship as the unit of analysis copyright 1989 by blackwell publishing ltd

keep searching and you ll find what do we know about variety creation through firms search activities for innovation this article critically reviews and synthesizes the contributions found in theoretical and empirical studies of firm level innovation search processes it explores the advantages and disadvantages of local and non local search discusses organizational responses and identifies potential exogenous triggers for different kinds of search it argues that the initial focus on local search was a consequence in part of the attention in evolutionary economics to path dependent behavior but that as localized behavior was increasingly accepted as the standard mode studies began to question whether local search was the best solution in all cases more recently the literature has focused on the trade offs being created by firms having to balance local and non local search we account also for the apparent variety paradox in the stylized fact that organizations within the same industry tend to follow different search strategies but end up with very similar technological profiles in fast growing technologies the article concludes by highlighting what we have learnt from the literature and suggesting some new avenues for research

why do sellers usually prefer auctions we compare the most common methods for selling a company or other asset when participation is costly a simple simultaneous auction and a sequential process in which potential buyers decide in turn whether to enter the bidding the sequential process is always more efficient but preemptive bids transfer surplus from the seller to buyers because the auction is more conducive to entry precisely because of its inefficiency it usually generates higher expected revenue we also discuss the effects of lock ups matching rights break up fees as in takeover battles entry subsidies etc

the trap of continual ownership change in international equity joint ventures this article examines how multiple ownership changes unfold in international equity joint venture iejv evolution and how such repeated changes impact short term performance and long term survival by theorizing a new concept the trap of continual change in the iejv context we challenge the adaptive viewpoint assumed in alliance dynamics research we propose that partners sometimes respond to an initial dissatisfaction with the venture result with a dysfunctional repetition of rearranging the ownership control structure this continual change locks the organization into bad choices and sends it into a downward spiral acknowledging the mixed motive nature of inter partner relationships we incorporate cooperative versus competitive dynamics manifested in shared control arrangements we propose that shared ownership control lends stability to the iejv until the initial iejv agreement is renegotiated this stability is a result of the cooperative forces of mutual interdependence and mutual forbearance between the partners however when the power balance breaks down the potential for inter partner conflict increases when the ownership control structure of the iejv is restructured especially multiple times shared control arrangements become increasingly unstable as behavioral cultural and managerial differences are amplified

do firms learn to create value the case of alliances we investigate whether firms learn to manage interfirm alliances as experience accumulates we use contract specific experience measures in a data set of over 2000 joint ventures and licensing agreements and value creation measures derived from the abnormal stock returns surrounding alliance announcements learning effects are identified from the effects of unobserved heterogeneity in alliance capabilities we find evidence of large learning effects in managing joint ventures but no such evidence for licensing contracts the effects of learning on value creation are strongest for research joint ventures and weakest for marketing joint ventures these results are consistent with the view that learning effects are more important in situations characterized by greater contractual ambiguity copyright 2000 john wiley sons ltd

overcoming export manufacturers dilemma in international expansion learning and acquiring local market knowledge from foreign distributors are central to manufacturers export market performance drawing from the resource based view we propose that manufacturers need to develop stronger local market competence while simultaneously minimizing the costs of distributor opportunism in order to compete successfully in the export market cultural distance and other barriers however may hinder the development of local market competence for the manufacturer while contributing to the occurrence of distributor opportunism in order to overcome these barriers we examine the impact of three alternative forms of manufacturer governance trust knowledge sharing and contract based relationship in export channels findings suggest that all three governance mechanisms contribute to enhancing the manufacturer s competence to exploit local market opportunity however of the three trust seems to be the only effective way to curtail distributor opportunism

informal institutions and absorptive capacity a cross country meta analytic study the informal institutions construct has not been well understood in prior research we contribute to the informal institutions literature by developing a generalized two by two conceptualization of institutions that juxtapose the dimension of behavioral uncertainty versus environmental uncertainty and the dimension of informal institutions versus formal institutions in particular we theorize informal institutions based on the extent to which they reduce behavioral uncertainty or environmental uncertainty as well as their alignment with the formal institutional environment with respect to the two types of uncertainty leveraging this fourfold typology we shed new light on the importance of informal institutional conditions in theories of firms absorptive capacity and performance using a cross country meta analytical approach we find that a firm s absorptive capacity is more positively related to performance outcomes in countries with informal institutions that reduce behavioral uncertainty and environmental uncertainty furthermore the misalignment between informal and formal institutions with respect to behavioral uncertainty and environmental uncertainty weakens the relationship between absorptive capacity and performance outcomes overall by re emphasizing the fundamental role of informal institutions in reducing behavioral and environmental uncertainties our typology offers a fine grained perspective to conceptualize informal institutions and constitutes an opportunity to advance theory in informal institutions and international business

instabilities of strategic alliances an internal tensions perspective the instabilities of strategic alliances have been examined in the literature through a number of theoretical approaches alliance instabilities refer to major changes or dissolutions of alliances that are unplanned from the perspective of one or more partners although the literature identifies certain characteristics of strategic alliances that may lead to their unplanned dissolution the extent of our understanding of this subject appears to be fragmented and incomplete in this article we propose a comprehensive framework for adequately understanding alliance instabilities based on the notion of internal tensions we suggest that strategic alliances are sites in which conflicting forces develop and which can be viewed as being constituted by three key pairs of competing forces namely cooperation versus competition rigidity versus flexibility and short term versus long term orientation this tensions framework helps us in explaining the intrinsic vulnerability of alliances in terms of a wide range of internal contradictions and enables us to examine in an integrated manner the incidence dynamics and eventual dissipation of the inherent instabilities we discuss the interrelationships among the different internal tensions and their impacts on different types of strategic alliances we also examine the termination of alliances through mergers acquisitions and dissolution finally we suggest ways to empirically test the various ideas and propositions developed here and indicate directions for further research

global platforms and ecosystems implications for international business theories the emergence of digital platforms and ecosystems dpe as a venue for value creation and capture for multinational enterprises holds considerable implications for the theory and practice of international business in this paper we articulate these implications by considering the dual perspectives of cross border platforms and ecosystems as a venue for multifaceted innovation and as multisided marketplace and focusing on three overarching themes at the intersection of dpes and international business that is dpes as affording new ways of internationalization as facilitating new ways of building knowledge and relationships and as enabling new ways of creating and delivering value to global customers we explain specific dpe related concepts and constructs that underlie these themes and discuss how they could be incorporated into existing ib theories in ways that would enhance their richness and continued relevance as well as their ability to better predict a multitude of emerging ib phenomena

a social capital paradox entrepreneurial dynamism in a small world clean technology cluster abstract clean tech entrepreneurs have struggled to gain investor confidence because of some particular characteristics and circumstances of the industry this research combines network and sustainable development literature in the clean tech context to support the logic of a new investment approach that may stimulate sustainable investing in clean tech theory is proposed to suggest that there may be an advantageous social capital paradox where strong ties in a cluster lead to dynamism rather than decay the clean tech industry provides a context where strong ties offer network stability in a small world cluster such that it is a value creating organizational form offering greater dynamism two related propositions are developed to support the social capital paradox they lead to a theoretical conclusion that long term integrated partner solutions where partners are also resource constrained lead to successful alliances supporting a dynamic cluster that will grow over time a practical conclusion is that investing in a connected cluster of firms might be less risky compared to investing in a new firm or even a portfolio of well diversified assets de risking clean production investments may be achievable through a small world network cluster backed security

venture capitalists and cooperative start up commercialization strategy this paper examines the possible impact of venture capital vc backing on the commercialization direction of technology based start ups by asking to what extent if at all do vc funded start ups engage in cooperative commercialization strategies strategic alliances or technology licensing or both relative to a comparable set of start ups and with what consequences to address these questions i assemble a novel data set that matches firms receiving a federal research and development subsidy through the u s small business innovative research program to vc funded firms by observable characteristics in five technology intensive industries these data allow decoupling of cooperative activity resulting from start up development via the passage of calendar time from that due to association with vcs an analysis of the 696 start ups in the sample split by an external funding source suggests substantial boosts in both cooperative activity associated with vc backed firms and in the likelihood of an initial public offering

competing globally allying locally alliances between global rivals and host country factors an emerging literature highlights the relationship between competitive intensity and the likelihood that two rival firms will form an alliance placing this argument in an international context we first suggest that the global competitive intensity between two rival multinationals positively affects the likelihood that they will ally in any host country additionally we highlight how a number of host country contextual factors moderate the relationship between global competitive intensity and alliance formation in a given host country we test our hypotheses with a sample of 13 global automobile companies operating in 27 countries and the results largely support our predictions

an integrated anti opportunism system in international exchange building on economic and social exchange theories this study develops an integrated model in which curtailing opportunism in international joint ventures ijvs requires four interrelated sets of suppressing forces 1 contractual ordering contractual inclusiveness and contractual obligatoriness 2 structural ordering managerial governance and equity captiveness 3 relational ordering interparty attachment and boundary spanner ties and 4 justice ordering procedural justice and distributive justice using a sample of 192 ijvs in an emerging market this study finds general support for our theoretical model our research validates that countering opportunism involves a system wide effort that integrates economic and social mandates unifies ex ante and ex post mechanisms controls both egoistic and non egoistic motivations and combines organizational level and individual level forces for partners from individualist cultures economic ordering forces contractual and structural are stronger than social ordering forces relational and justice in relation to opportunism resistance whereas for partners from a collectivistic culture social ordering forces are relatively stronger than economic ordering forces for this end

technological exploration through licensing new insights from the licensee s point of view the market for technology plays a crucial role in firms technology strategy as a way to undertake search in the available technological space drawing on innovation search theory and the literatures on licensing and absorptive capacity ac we address the issue of the factors that affect how technologically distant from the existing technological portfolio in licensing firms are able to move when they in license externally developed technologies we posit that a long technological distance reflects the outcome of more exploratory search while a short distance reflects the outcome of exploitative search we conjecture two distinct dimensions of ac in terms of the firms stock of knowledge assimilation capacity and the degree to which firms have searched broadly in the past monitoring ability t o affect the distance of exploration from the existing technological portfolio furthermore we compare firms that explore through licensing and firms which do not explore through licensing but do so through search reflected in own patenting activities we propose that the effects of assimilation capacity and monitoring ability should be more pronounced for licensees combining data on 176 license agreements and related patent information and while using a control sample of non licensing firms we find with exceptions support for these ideas

the dynamics of learning alliances competition cooperation and relative scope we show how the tension between cooperation and competition affects the dynamics of learning alliances private benefits and common benefits differ in the incentives that they create for investment in learning the competitive aspects of alliances are most severe when a firm s ratio of private to common benefits is high we introduce a measure relative scope of a firm in an alliance to show that the opportunity set of each firm outside an alliance crucially impacts its behavior within the alliance finally we suggest why firms might deviate from the theoretically optimal behavior patterns 1998 john wiley sons ltd

effects of knowledge spillover on inter organizational resource sharing decision in collaborative knowledge creation collaborative knowledge creation is important for firms to gain new competitive advantages but knowledge outgoing spillover harms their existing competitive advantages which puts them into a dilemma when investing rd 2 because the leader invests resources first and faces moral hazards it has the incentives to participate in collaborative knowledge creation only when its benefits from collaborative knowledge creation fruits and knowledge incoming spillover are bigger than those of the follower and the more moral hazards it confronts the more it demands 3 the leader and the follower invest resources at ratios consistent with the benefits and costs the resources bring to them if they can determine the amount or the collaboration is unstable

funding for agricultural economics needs and strategies for the 1980s public funding for work in agricultural economics teaching research and extension appears to be declining in real terms at the start of the 1980s following two decades of real increases there is a call for reductions in spending by government at all levels a call for less taxes and for public accountability at the same time there are more students in the courses that agricultural economists teach there is a renewed interest in agricultural business curricula graduate study in agricultural economics is attracting new students from the biological and social sciences as well as agriculture the demand for competent applied economists particularly agricultural economists with advanced degrees appears to be growing the anomaly of apparent increases in demand coupled with declining public funding presents a challenge to the profession it should be one for which economists are prepared after all we regularly teach students about economic decision rules for allocating scarce resources among competing ends the political environment requires that we take our classroom lessons seriously and put them in practice in our own operations this paper explores several approaches and strategies for funding work in agricultural economics and more effective use of current resources we begin with an overview of changes in funding during the decade of the 1970s drawing upon secondary data and results of a mail questionnaire sent to agricultural economics department chairmen and administrators in the spring of 1981 we turn then to discussion of the demand current and prospective for services of agricultural economists and the capacity of current institutions to service that demand we conclude with discussion of funding strategies and recommendations on actions which might be pursued by the aaea

learning and protection of proprietary assets in strategic alliances building relational capital one of the main reasons that firms participate in alliances is to learn know how and capabilities from their alliance partners at the same time firms want to protect themselves from the opportunistic behavior of their partner to retain their own core proprietary assets most research has generally viewed the achievement of these objectives as mutually exclusive in contrast we provide empirical evidence using large sample survey data to show that when firms build relational capital in conjunction with an integrative approach to managing conflict they are able to achieve both objectives simultaneously relational capital based on mutual trust and interaction at the individual level between alliance partners creates a basis for learning and know how transfer across the exchange interface at the same time it curbs opportunistic behavior of alliance partners thus preventing the leakage of critical know how between them copyright 2000 john wiley sons ltd

corporate takeover bids methods of payment and bidding firms stock returns this study explores the role of the method of payment in explaining common stock returns of bidding firms at the announcement of takeover bids the results reveal significant differences in the abnormal returns between common stock exchanges and cash offers the results are independent of the type of takeover bid i e merger or tender offer and of bid outcomes these findings supported by analysis of nonconvertible bonds are attributed mainly to signalling effects and imply that the inconclusive evidence of earlier studies on takeovers may be due to their failure to control for the method of payment recent studies on corporate takeovers provide inconclusive results on the valuation effects of acquisitions on the common stock of bidding firms 1 substantial differences are reported between the studies that analyze acquisitions initiated as tender offers and those that confine their samples to merger proposals the existence of mixed empirical findings for the bidding firms makes it difficult to interpret existing evidence and to draw conclusions about the managers acquisition motivations nevertheless the reason for the substantial difference between empirical findings on mergers and tender offers still remains an unresolved issue it is observed however that mergers are usually common stock exchange offers whereas tender offers are usually cash offers given that different methods of financing a project have different signalling implications myers and majluf 39 the differential stock returns of bidders in mergers and tender offers may be due to the method of acquisition financing

when competition eclipses cooperation an event history analysis of joint venture failure why do so many joint ventures fail despite the fact that their success is the exception rather than the rule the literature on why joint venture performance has been so poor remains fragmentary we address this issue adopting a transaction cost economics perspective and modeling joint ventures as governance structures that blend the advantages and drawbacks of both markets and hierarchies using a data base on electronics industry ventures and event history analysis we identify several predictors of joint venture failure and test for their influences a key finding is that the presence of competition between joint venture partners outside of the agreement significantly impairs chances for the operation s chance of survival we also find clear evidence that the failure rate of joint ventures is nonmonotonic rising to a peak in the middle term and then declining finally we compare and contrast predictors of terminations due to failure to those due to acquisition of the joint venture by one of its partners our overall conclusions highlight implications for strategic choice theory building and the management of joint ventures

cross function and same function alliances how does alliance structure affect the behavior of partnering firms firms collaborate to develop and deliver new products these collaborations vary in terms of the similarity of the competencies that partnering firms bring to the alliance in same function alliances partnering firms have similar competencies whereas in cross function alliances partners have very different competencies on examining managers view of these alliances we find that on average same function alliances are expected to perform better than cross function alliances holding fixed the level of inputs a game theoretic analysis shows that this apprehension about cross function alliances is consistent with a pareto inferior equilibrium a pareto superior equilibrium however suggests that partners in cross function alliances may invest more in their alliances than those in same function alliances it is also often believed that increasing the number of partnering firms is not conducive for collaborative effort our analysis shows that this belief is correct for same function alliances but not for cross function alliances we test these equilibrium predictions in an experiment where we exogenously vary the type of alliance and the number of partnering firms the experimental results lend support for the pareto superior equilibrium partners in cross function alliances invested more than their counterparts in same function alliances and this difference in investment levels increased with the number of partnering firms we extend our model to consider alliances where firms have an opportunity to learn from their partners and later leverage this knowledge outside the scope of their alliance though such learning increases the resources committed by alliance partners in the learning phase it decreases investment in the subsequent competition and also dampens the overall investment across the two stages in addition an increase in interalliance competition decreases investments in the focal alliance but increases investment in the competition outside the scope of the alliance

control cooperation interfaces in global strategic alliances a situational typology and strategic responses this article applies the dialectical logic of loose coupling to interpartner exchanges in order to analyze the dynamics of global strategic alliances we develop a typology of control and cooperation that defines alliance states or situations according to their level of cooperation under private and collective control in the private control cooperation interplay contending honeymoon and coopetition situations arise depending on the levels of private control and cooperation in the collective control cooperation interplay the loosely connected the equity hostage the tightly integrated and the trusting states emerge according to the levels of collective control and cooperation we illustrate how an individual partner strategically responds to the control cooperation interplay under each situation or state and develop hypotheses explicating how these strategic responses are influenced by relational characteristics such as goal congruity resource complementarity and bargaining asymmetry between foreign and local partners

the choice between mergers acquisitions and joint ventures the case of japanese investors in the united states this paper investigates the determinants of the choice between two alternative methods of pooling similar and complementary assets the merger acquisition and the greenfield equity joint venture two theories of the determinants of that choice are tested on a sample of japanese investments in the united states the results show that equity joint ventures are preferred over acquisitions when the desired assets are linked to nondesired assets because the u s firm owning them is large and not divisionalized when the japanese investor has little previous experience of the american market and hence seeks to avoid postmerger integration problems when the japanese investor and the u s partner manufacture the same product and when the industry entered is growing neither very rapidly nor very slowly

complexity context and governance in biotechnology alliances this study explores the effect of coordination needs on alliance governance we examine coordination needs that arise as a consequence of the characteristics and the context of the alliance we posit that alliance characteristics and contextual factors influence alliance form and equity investment levels we evaluate the effects of the complexity of technology transfer and strategic complexity of the alliance we also study contextual factors represented by the distance between the intellectual property protection regimes of the home countries of the participants the focal firm s prior presence in the alliance country and its primary expertise in the industry we offer contrasting predictions based on appropriation and coordination perspectives our results demonstrate support for a dominant coordination perspective with alliance characteristics and some contextual factors influencing alliance form appropriation concerns play a weaker role and receive less support

arms race or detente how interfirm alliance announcements change the stock market valuation of rivals most prior event studies find that the announcement of a new alliance is accompanied by a positive stock market response for the partners this result has usually been interpreted as evidence for the prevailing view that alliances are effective vehicles for partners to acquire or access new skills and thus become stronger competitors however partners should also earn positive abnormal returns if alliances are used to shape competitive interactions attenuating competitive intensity industry wide in this study we disentangle these different mechanisms by examining how alliance announcements affect the stock market s evaluation of allying firms rivals if an alliance is expected to make partner firms more competitive this should lead to negative abnormal returns for partners rivals if an alliance is expected to facilitate a reduction in competitive intensity this should lead to positive abnormal returns for rivals results from an event study analysis of research and development alliances in the telecommunications and electronics industries during 1996 2004 provide evidence consistent with competition attenuation in some alliances our research thus challenges the increasingly narrow focus on learning and resource accumulation through alliances and calls for broader consideration of the roles and effects of collaboration both for individual firms and for industry structure

dynamic capabilities and their indirect impact on firm performance this article seeks to empirically explore the relationship between dynamic capabilities and firm performance in particular it addresses the question of whether dynamic capabilities impact directly or indirectly on performance in doing so the article articulates and measures a construct of dynamic capabilities and using structural equation modeling it examines whether their impact on performance is mediated through operational marketing and technological capabilities the proposed model is tested in different levels of environmental dynamism using data on 271 greek firms belonging to the manufacturing sector empirical findings suggest that dynamic capabilities impinge on operational capabilities which in turn have a significant effect on performance direct effects on performance are found to be insignificant furthermore similar effects seem to hold for both higher and lower levels of environmental dynamism theoretical and practical implications are discussed

differential gains between partners in joint ventures role of resource appropriation and private benefits i examine why there are differences in wealth gains between firms when they announce a joint venture jv building on transaction cost economics and the resource based view i argue that because jvs often involve incomplete contracts differences in wealth gains arise due to resource appropriation and private benefits as a result two factors become important in understanding whether a firm earns higher lower wealth gains than its partner 1 its potential for earning private benefits and 2 its ability to extract private benefits as a test of the impact of the first factor i propose that when a jv is formed the partner that possesses more valuable resources is likely to earn lower wealth gains whereas the partner that possesses less valuable resources is likely to earn higher wealth gains because its potential for earning private benefits over the course of the venture is also higher i then argue that the partner with less valuable resources is likely to extract higher private benefits and gain more when it has greater bargaining power and absorptive capacity conversely the partner with more valuable resources is likely to protect itself better from appropriation when it has jv capabilities i find support for these arguments in a sample of 344 ventures the implications are that private benefits significantly influence value creation in jvs and that a broad array of contingencies and factors affect these benefits which need to be considered when entering into a cooperation

when should sellers use auctions the simultaneous bid auction is a standard method for sellers to solicit offers from buyers a simple alternative is for a seller to ask buyers to make offers sequentially if it is costly for buyers to participate the sequential mechanism will tend to be more efficient than the simultaneous auction because later potential buyers can condition their participation decisions on earlier bids however the sequential mechanism s greater efficiency may not produce higher revenues because while the possibility of deterring later potential entrants can lead early bidders to bid aggressively the fact that later firms might be deterred will tend to reduce revenues the relative revenue performance of the mechanisms will therefore depend on whether the threat of potential future competition which can raise bids in the sequential mechanism is more valuable to the seller than actual competition which will tend to be greater in the simultaneous auction the relative revenue performance of these alternative mechanisms has direct implications for how assets should be sold in the case of how to structure the sale of corporations this question has attracted attention from practitioners and commentators since the delaware supreme court s 1986 revlon decision charged a board overseeing the sale of a company with the duty of getting the best price for the stockholders revlon v mcandrews and forbes holdings 1986 in practice

learning from competing partners outcomes and durations of scale and link alliances in europe north america and asia this paper investigates the outcomes and durations of strategic alliances among competing firms using alliance outcomes as indicators of learning by partner firms we show that alliance outcomes vary systematically across link and scale alliances link alliances are interfirm partnerships to which partners contribute different capabilities while scale alliances are partnerships to which partners contribute similar capabilities we find that partners are more likely to reorganize or take over link alliances than scale alliances by contrast scale alliances are more likely to continue without material changes the two types of alliances are equally likely to shut down at similar ages these results support the view that link alliances lead to greater levels of learning and capability acquisition between the partners than do scale alliances copyright 2000 john wiley sons ltd

leveraging research and development assessing the impact of the u s advanced technology program this paper examines the factors that affect a firm s chances of winning an award from the advanced technology program atp and the subsequent impact of the award on a firm s success in raising additional funds for its research and development rd the halo effect from the award increases the success of these firms in attracting additional funding from other sources our conclusion is that the atp is leveraging activities that have a strong potential for broad based economic benefit

auctions of companies robert g hansen auctions of companies are conducted in ways that contradict received auction theory the major puzzles are 1 sellers restrict the number of bidders 2 sellers restrict the number of bidders 3 bidders are screened by an initial round of nonbinding bids and 4 bidders offer and sellers sometimes accept preemptive bids puzzles 1 2 and 4 are explained by assuming that some information concerning the company can if released reduce the value of the company puzzle 3 is explained as a way for sellers to select the highest valued bidders equilibrium is maintained by using the initial bids to set a reserve price for the final bidding round jel d44 d82 g34 i introduction from 1989 to 1998 19 593 private companies were reported to be bought and sold in the united states many through an auction process the total value of these transactions was in excess of 315 billion 1 in addition from 1989 to 1998 there were 13 134 reported divestitures of divisions subsidiaries or product lines the value of these transactions was in excess of 900 billion perhaps not surprisingly an industry of advisors auctioneers exists to facilitate these transactions and the institutional framework by which auctions of companies are conducted has become somewhat standardized the purpose of this article is to apply auction theory to explain this standardized institutional framework the article proceeds as follows section ii describes the standardized process used for selling private companies or divisions of public companies points out how these practices conflict with certain aspects of received auction theory and presents initial arguments that explain the rationality of the practic es in section iii a more formal model is developed to show how some of the standard corporate auction practices can be explained section iv deals with what may be the most intriguing institutional practice the use of preliminary nonbinding indications of interest section v concludes the article with a preliminary discussion of entry fees and preemptive bidding ii the typical auction process and consistency with auction theory the typical process for selling a private company or division of a public company runs as follows 2 upon making the decision to sell the selling company will retain or will already have retained an advisor who will serve as de facto auctioneer the auctioneer drawing on knowledge of the selling company will draw up a preliminary list of potential bidders this list will probably include competitors suppliers customers and acquisition oriented conglomerates or leveraged buyout houses the advisor will also exercise his judgment at this time as to whether or not a prospective bidder will be willing and able to complete a transaction at a satisfactory price if a negative judgment is made that potential bidder will likely be excluded from further participation the remaining prospective bidders will receive a very cursory description of the selling company and will be offered a more in depth offering memorandum if they sign a confidentiality agreement although the first cursory description may no t even include the selling company s name the offering memorandum will be quite detailed including the sort of information that would typically be in a public corporation s securities and exchange commission 10k filing as well as traditionally confidential information on current issues at the selling company overview of costs plans for market and product developments and so on the next step is for the prospective bidders to submit preliminary nonbinding indications of interest for the selling company these indications will be either a number or a range of numbers that are supposed to represent bidders first approximations of their estimates of the value of the target 3 the preliminary indications are then used by the auctioneer to further reduce the number of bidders who will proceed further only the top bidders on their list are permitted to go forward 4 although the screening is clearly not as straightforward as the preceding passage presumes there is no doubt that the likelihood of ad mittance to the next round increases with the preliminary bid even though that bid is nonbinding

risky innovation the impact of internal and external r d strategies upon the distribution of returns a b s t r a c t external innovation increases the profits of the median firm but also increases dispersion and the kur tosis of the distribution of profits this means that external strategies are risky and may require a very large number of attempts before average returns are obtained this puts smaller firms into a position of disproportionately high risk despite the earlier evidence that the rewards from innovation are positively skewed we find no effect of innovation strategies upon the skewness of the distribution of firms profits

measuring performance of international joint ventures international joint ventures ijvs are increasing in frequency and strategic importance however efforts to identify variables associated with ijv performance have been constrained by disagreements regarding the comparability and reliability of alternative performance measures and methods this study tests several hypotheses regarding the reliability and comparability of a range of objective and subjective measures of ijv performance as well as evaluating the relative utility of different data collection approaches

unintentional unavoidable and beneficial knowledge leakage from the multinational enterprise knowledge leakage as an undesirable outcome for mnes is an accepted view in ib literature we challenge this view and argue that knowledge leakage is often unintentional unavoidable and beneficial for the mne in a highly networked and information rich society knowledge leakage from mnes 1 happens naturally due to interfirm relationships interactions and socialization 2 is unavoidable due to employee mobility and 3 facilitates knowledge inflows due to the reciprocity nature of knowledge exchange and hence is beneficial for mnes in addition the costs of protecting knowledge incurred by an mne will often outweigh the benefits

costly auction entry royalty payments and the optimality of asymmetric designs abstract we analyze optimal auction mechanisms when bidders base costly entry decisions on their valuations and bidders pay with a fixed royalty rate plus cash with sufficient valuation uncertainty relative to entry costs the optimal mechanism features asymmetry so that bidders enter with strictly positive but different ex ante probabilities when bidders are ex ante identical higher royalty rates which tie payments more closely to bidder valuations increase the optimal degree of asymmetry in auction design further raising revenues when bidders differ ex ante in entry costs the seller favors the low cost entrant whereas when bidders have different valuation distributions the seller favors the weaker bidder if entry costs are low but not if they are high higher royalty rates cause the seller to favor the weaker bidder by less and the strong bidder by more

enhancing value via cooperation firms process benefits from participation in a standard consortium firms benefit from participating in a consortium in two ways from final products and from the cooperation process process benefits including interorganizational learning and social capital benefits are critical to motivate firms to participate in a consortium however there is limited understanding of what factors enable firms to obtain process benefits via consortium activities based on 232 member surveys collected from seven e business standard consortia we find that firms anticipate more process benefits if they are more technically capable value the forthcoming standards higher and participate in a better managed consortium surprisingly although relational risks exist due to potential competition among consortium members their impacts on process benefits are insignificant in e business standard consortia furthermore our empirical analysis suggests that more technically capable firms handle relational risk less effectively when learning within the consortium copyright 2012 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

in search of complementary assets the determinants of alliance formation of high tech start ups abstract why do new technology based firms ntbfs cooperate starting from teece s teece d j 1986 profiting from technological innovation implications for integration collaboration licensing and public policy research policy 15 285 305 conceptual framework and taking advantage of subsequent literature on alliance formation in the resource and competence based tradition and in the social structure perspective we derive an empirical model that aims at highlighting the inducements and obstacles that these firms face in alliance formation according to firm specific characteristics and the nature of the alliance in particular a distinction is made between exploitative commercial alliances and explorative technological alliances the econometric estimates based on a large sample of italian young high tech firms that are observed from 1994 to 2003 provide strong evidence supporting two key intuitions of teece s work first the combination of specialized complementary assets appears to be a key driver of the formation of exploitative commercial alliances by ntbfs more specifically patent holding affects positively the likelihood to establish commercial alliances but this propensity is found to rapidly decrease with firm size suggesting that as long as ntbfs become larger and possess specialized commercial assets their urge for commercial alliances diminishes second following the parallelism set forth by teece between search for alliance partners and access to external financing the analysis indicates that potentially beneficial alliances may not take place because of the high transaction costs faced by smaller ntbfs in this respect our results clearly support the view that sponsor institutions as public research organizations venture and corporate venture capitalists may sensibly reduce these costs and that their role crucially depends on both the identity of the sponsor and the type of alliance

the duality of collaboration inducements and opportunities in the formation of interfirm linkages i argue that the linkage formation propensity of firms is explained by simultaneously examining both inducement and opportunity factors drawing upon resource based and social network theory literatures i identify three forms of accumulated capital technical commercial and social that can affect a firm s inducements and opportunities to form linkages firms possessing these capital stocks enjoy advantages in linkages formation however firms lacking these accumulated resources can still form linkages if they generate a radical technological breakthrough thus i identify paths to linkage formation for leading as well as peripheral firms i test these arguments with longitudinal data on technical collaborative linkages in the global chemicals industry copyright 2000 john wiley sons ltd

learning dynamics in research alliances a panel data analysis the aim of this paper is to empirically test the determinants of research joint ventures rjvs group dynamics we develop a model based on learning and transaction cost theories which represent the benefits and costs of rjv participation respectively according to our framework firms at each period in time weigh the benefits against the costs of being an rjv member rjv dynamics can then be interpreted as a consequence of this evolving trade off over time we look at entry turbulence and exit in rjvs that have been set up under the us national cooperative research act which allows for certain antitrust exemptions in order to stimulate firms to co operate in r d accounting for unobserved project characteristics and controlling for inter rjv interactions and industry effects the tobit panel regressions show the importance of group and time features for an rjvs evolution we further identify an average rjvs long term equilibrium size and assess its determining factors ours is a first attempt to produce robust stylized facts about co operational short and long term dynamics a neglected dimension in research co operations but an important element in understanding how collaborative learning works

dynamic r d competition the authors study a simple two stage stochastic patent race involving two firms they examine the behavior of the participants as they gain the lead or fall behind in the race the authors find that the leader engages in rd 2 a policy of issuing patents for intermediate research results and 3 the effects of research joint ventures whereby the firms coordinate their initial research efforts and share their results copyright 1987 by royal economic society

auctions versus negotiations which is the more profitable way to sell a company an auction with no reserve price or an optimally structured negotiation with one less bidder we show under reasonable assumptions that the auction is always preferable when bidders signals are independent for affiliated signals the result holds under certain restrictions on the seller s choice of negotiating mechanism the result suggests that the value of negotiating skill is small relative to the value of additional competition the paper also shows how the analogies between monopoly theory and auction theory can help derive new results in auction theory jel d44 g34 there are close analogies between standard price theory and the theory of auctions in an absolute english auction in which the price rises continuously until only one bidder remains and the seller is required to accept the final bid the sale price equals the lowest competitive price at which supply equals demand in the theory of optimal auctions the seller is treated as a monopolist who can choose any

the scope of alliances we develop the notion that the choice of alliance scope materially affects the character of benefits that alliance participants receive and thereby affects a range of issues having to do with the initiation evolution and termination of the alliance indeed while under emphasized by academics determining alliance scope ranks among the most important tasks undert aken by practitioners of alliances restricting ourselves to alliances where mutual learning is the primary raison d etre we first define private benefits as those that accrue to subsets of participants in an alliance and common benefits as those that accrue collectively to all participants we demonstrate how the choice of alliance scope affects the mix of private and common benefits and draw on earlier work to show how this in turn affects alliance partners incentives to invest in learning as illustrations of the utility of the framework of private and common benefits we consider two applications a simple model illustrates the relationship between the choice of alliance scope the realization of private and common benefits and the stability or lack thereof of the alliance a second application sheds light on alliance evolution it examines factors affecting both a how a particular alliance evolves and b how firms manage sequences of alliances two broader theoretical points also emerge from this discussion of alliance scope first we argue that an analytical focus solely on the individual alliance may be inappropriate for studying a wide range of issues of the multiple sources of benefits that accrue to alliance participants there are some whose realization depends on activities in which the firm is engaged but that may have little to do with the alliance in question second in contrast to much of the literature on alliances our analysis is based upon the primitives of benefit streams rather than on transaction cost reasoning this complementary perspective is better suited to the task of highlighting how activities not governed by an alliance might nonetheless affect multiple aspects of the alliance