Distance Costs and The Degree of Inter‐Partner Involvement in International Relational‐Based Technology Alliances

Abstract

This research studies the effect of specific institutional and distance cost issues, in particular the protection of intellectual property rights and geographic distance, on the preference of companies for different governance modalities in terms of the degree of their involvement in international relational‐based technology alliances. In the sample, all technology alliances contain exclusive technology agreements. We find that international differences in intellectual property rights protection regimes between the home countries of partnering companies are a significant factor: the larger the difference, the more likely that partnering companies prefer to form an equity relational‐based technology alliance with substantial inter‐partner involvement. The degree of geographic distance between partners also affects the preference of companies for a particular form of relational‐based agreement. Companies prefer to engage in deeper inter‐partner involvement, albeit of a non‐equity nature, in case of large geographic distance between the home countries of the partnering companies.

International coopetition for innovation: Are the benefits worth the challenges?

“…Nielsen and Nielsen (2009) argued that the likelihood of failure is high due to dissimilarities between partners. The international nature of the relationship increases the complexity and uncertainty involved, and one example is that the enforcement of intellectual property rights differs between countries, thus increasing the risk related to international technology alliances (Kranenburg et al 2014). In addition, monitoring the relationship with partners in countries with a large institutional distance is difficult and costly, and the distance also makes conflict resolution more difficult (Davidson and McFetridge 1985).…”

Equity Structure of MNE Affiliates and Scope of Their Activities: Distinguishing the Incentive and Control Effects of Ownership

“…We hope this study will inspire more research on the effect of governance structure on the conduct of KIAs at MNE affiliates. One way to expand this study is to include additional control mechanisms such as various formal contractual stipulations or relational arrangements, as examined by van Kranenburg, Hagedoorn, and Lorenz‐Orlean (, this issue). It would be interesting to examine whether equity ownership, relational contracting, and formal contractual clauses are complementary or supplementary in influencing decisions on the scope of KIAs at MNE affiliates (Poppo and Zenger, ).…”

Post‐Formation Inter‐Partner Equity Transfers in International Joint Ventures: The Role of Experience

“…Third, we controlled for a factor related to inter‐partner transaction costs (van Kranenburg, Hagedoorn, and Lorenz‐Orlean, , this issue; Puck et al . ).…”