The Institutional Effects on Strategic Alliance Partner Selection in Transition Economies: China vs. Russia

Abstract

China and Russia represent major economies in transition from command economies, yet their paths to the market have differed greatly. Their divergent approaches have helped create distinct institutional environments. This study focuses on a particularly important strategic decision firms face—alliance partner selection. The study's results suggest that China's more stable and supportive institutional environment has helped Chinese firms take a longer-term view of alliance partner selection, focusing more on the potential partner's intangible assets along with technological and managerial capabilities. In contrast, the less stable Russian institutional environment has influenced Russian managers to focus more on the short term, selecting partners that provide access to financial capital and complementary capabilities so as to enhance their firms—ability to weather that nation's turbulent environment. This study contributes to knowledge about the influence of the institutional environment on alliance partner selection decisions for firms domiciled in transition (and emerging) economies.

Partner Selection in R&D Collaborations: Effects of Affiliations with Venture Capitalists

“…First, our extension of information economics to the literature on partner selection adds to other theories used to understand which partners a firm selects or should select. For instance, much of the research on partner selection emphasizes how firms should prioritize exchange partners that present strategic, organizational, and cultural fit, as well as those having complementary resources, for effective alliance implementation (e.g., Tallman and Shenkar, 1994;Luo, 1997;Hitt et al, 2004;Ring et al, 2005;Rothaermel and Boeker, 2008;Shah and Swaminathan, 2008;Beamish and Lupton, 2009;Mitsuhashi and Greve, 2009;Diestre and Rajagopalan, 2012). Our theory suggests that in spite of such resource considerations for selecting exchange partners, firms often confront inefficiencies and difficulties in judging each other's technological and other resources in the first place.…”

“…While considerable research emphasizes that firms select partners based upon their resources and capabilities (e.g., Geringer, 1991;Mowery et al, 1998;Hitt et al, 2004;Li et al, 2008;Dekker and Van den Abbeele, 2010;Diestre and Rajagopalan, 2012), less attention has been given to the constraints and challenges firms face during partner selection. Firms often confront considerable uncertainty concerning a prospective partner's resources and prospects, and they are subject to risks associated with asymmetric information when searching for R&D partnerships (e.g., Pisano, 1990).…”

“…Beyond investigating this value-added role of venture capitalists and extending information economics to the literature on partner selection, we show that investigating VCs in the alliance context can inform the partner selection literature more broadly in three ways (e.g., Tallman and Shenkar, 1994;Luo, 1997;Hitt et al, 2004;Ring et al, 2005;Rothaermel and Boeker, 2008;Shah and Swaminathan, 2008;Beamish and Lupton, 2009;Diestre and Rajagopalan, 2012). First, existing research highlights the signaling role of affiliations with VCs in shaping firms' opportunities for transactions (e.g., Hsu, 2006;Ragozzino, 2012, 2014;Reuer, Tong, and Wu, 2012;Ozmel et al, 2013), yet we suggest that VCs can facilitate R&D alliances between individual prospective partners that lack first-hand knowledge about each other's technological resources.…”

“…Partner selection has been regarded as one of the most important choices firms make regarding their collaborative strategies (e.g., Geringer, 1991;Tallman and Shenkar, 1994;Luo, 1997;Hitt et al, 2004;Ring et al, 2005;Shah and Swaminathan, 2008;Beamish and Lupton, 2009;Dekker and Van den Abbeele, 2010). Specifically, these decisions can have an impact on the technological and other resources that firms access through collaborative agreements (e.g., Hagedoorn, 2002), and they are particularly important for R&D alliances involving entrepreneurial ventures in high-tech industries (e.g., Deeds and Hill, 1996;Rothaermel and Boeker, 2008).…”

How powerful political ties appropriate resources and how weaker organizations protect themselves: A case study from Indonesia

“…Organizations commonly seek to create linkages with external parties to access key resources and opportunities (Hitt, Ahlstrom, Dacin, Levitas, & Svobodina, 2004), especially in emerging economies (Ahlstrom, Young, Nair, & Law, 2003). Yet these linkages also carry some costs and risks (Lin & Si, 2010).…”