33 Pages Posted: 23 Aug 2007 Last revised: 29 Oct 2015
Date Written: August 15, 2008
Most research on alliances ignores the structures of the underlying relationships as codified by contract. By overlooking these structures the complexity of the fundamental relationship is ignored. This is problematic since it is how these relationships are codified and how control rights are allocated that dictate how firms will benefit (or not) from an alliance. We present a novel method to analyze the determinants of alliance complexity in a multi-dimensional framework. We then look at the effect these same determinants have on the allocation of control rights between firms. From a transaction cost perspective we can begin to look at the cost/benefit of entering more (or less) complex agreements in terms of the allocation of rights (i.e., value appropriation). This approach provides a new framework in which to begin to think about the net effect alliance portfolios have on a firm.
Keywords: Contractual complexity, Control rights, Strategic alliances, Biopharmaceutical industry, Contractual design
JEL Classification: G32, L22
Suggested Citation: Suggested Citation
Hansen, Zeynep K. and Higgins, Matthew John, A Multi-Dimensional View of Alliance Complexity and Value Division in Technology Sourcing Agreements (August 15, 2008). Available at SSRN: https://ssrn.com/abstract=1008926 or http://dx.doi.org/10.2139/ssrn.1008926