Download this Paper Open PDF in Browser

A Multi-Dimensional View of Alliance Complexity and Value Division in Technology Sourcing Agreements

33 Pages Posted: 23 Aug 2007 Last revised: 29 Oct 2015

Zeynep K. Hansen

Washington University in St. Louis - John M. Olin Business School; National Bureau of Economic Research (NBER)

Matthew John Higgins

Georgia Institute of Technology & NBER; National Bureau of Economic Research (NBER)

Date Written: August 15, 2008

Abstract

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

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

Zeynep Kocabiyik Hansen

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Matthew John Higgins (Contact Author)

Georgia Institute of Technology & NBER ( email )

800 West Peachtree Street
Atlanta, GA 30308
United States
404-894-4368 (Phone)
404-894-6030 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Paper statistics

Downloads
151
Rank
163,940
Abstract Views
783