Alliance governance choices: Disentangling the effects of uncertainty and alliance experience

Abstract

This article analyses the interaction between alliance experience and behavioural uncertainty to improve our understanding of alliance governance. We investigate the extent to which the effect of alliance experience on governance choices is explained by a reduction in "mundane" transaction costs or by a reduction in "opportunistic" transaction costs. Based on more than 12,000 firm experiences with equity and non-equity alliances, we demonstrate a reduction in mundane transaction costs over time by firms reusing the same governance structure in successive alliances. We also find that in high behavioural uncertainty alliances, firms rely on their experience as a substitute for equity governance to reduce opportunistic transaction costs.

Embracing the Paradox of Interorganizational Value Co‐creation–Value Capture: A Literature Review towards Paradox Resolution

“…A focal firm that collaborates with partners at a large cultural or geographical distance will experience information asymmetry, which increases the chance that partners will appropriate a disproportionate share of the rents or resources from the IOR (Li et al . ; Niesten and Jolink ; Wang and Zajac ). Similar difficulties have been reported for collaborations with unfamiliar partners or partners with incongruent goals (e.g.…”

“…In our literature review, we have identified several examples that relate to plurality of views, such as collaborating with partners from different countries, cultures, industries and sectors (Bolivar‐Ramos ; Colombo and Piva ; Niesten and Jolink ; Perkmann and Schildt ), or collaborating with competitors (i.e. coopetition) (Hallen et al .…”

Credibly reducing information asymmetry: Signaling on economic or environmental value by environmental alliances

“…Joint ventures are legally described as common venturing for profit under common control with each partner participating in profits and losses (Hale, 1956). They involve the formation of new and separate business entities (Niesten and Jolink, 2018), and are 'evaluated primarily as stand-alone entities seeking to maximize their own performance' (Anderson, 1990, p. 23). Joint ventures are tightly coupled forms of organizing in which the parent companies are linked together by formal structures (e.g.…”

“…In a comparative approach, a major difference between joint ventures and contracts is that joint ventures offer more safeguards against opportunistic behavior than contractual agreements (Oxley, 1997;Jolink and Niesten, 2016;Niesten and Jolink, 2018). They have been described as more protective governance structures (Oxley and Sampson, 2004) due to their administrative controls and incentive alignment via equity and profit sharing among partners (Oxley, 1997).…”

“…Occasionally, the deal texts indicate that an alliance is involved in more than one stage of the value chain. To reduce the number of categories for this variable, we only code the first stage of the value chain, with R&D preceding production and marketing (Niesten and Jolink, 2018).…”