The Intra-Alliance Division of Value Created through Collaboration

Abstract:     
The differential benefits reaped by individual partners are a major determinant of the impact of strategic alliances on firm performance, and an important (dis)incentive for alliance partners to collaborate in value creation. Theoretically, however, we lack an explicit theory of intra-alliance value division, and empirically, previous analysis has been hampered by methodological challenges. In response, therefore, we propose a bargaining framework for intra-alliance value appropriation, as well as a measure for capturing its variation. We test our hypotheses on a sample of 200 biotechnology R&D alliances, and find that we are able to explain variation in value appropriation across alliance partners, partner types, and individual firms of each type.

Keywords: Strategic alliances; intra-alliance bargaining; value appropriation; resource-based view; strategic factor markets; control rights

working papers series