Explaining Preferences for Control Rights in Strategic Alliances: A Property Rights and Capabilities Perspective Approach
40 Pages Posted: 29 Nov 2010 Last revised: 29 Oct 2015
Date Written: October 16, 2011
Increases in alliance activity between research-intensive firms and incumbents is puzzling since it is challenging to contract upon highly uncertain R&D activities. Our paper extends prior research by exploring the relationship between firm capabilities and preferences for control rights. This link is important because the allocation of control rights has been shown to influence alliance outcomes. Using data based on a survey of biotechnology firms, we find that both current and future capabilities provide strong explanatory power for understanding preferences for control rights. Our results allow us to integrate aspects of the capabilities perspective into the property rights framework.
Keywords: Organizational Economics, Property Rights, Capabilities Perspective, Strategic Alliances, Contract Theory
JEL Classification: L14, M13, O32, D82
Suggested Citation: Suggested Citation