Persistence of, and Interrelation between, Horizontal and Vertical Technology Alliances

Abstract

We explore to what extent there is persistence in, and interrelation between, alliance strategies with different partner types (customers, suppliers, competitors). In a panel dataset of innovation-active firms in the Netherlands during 1996-2004, we find persistence in alliance strategies with all three types of partners, but customer alliance strategies are more persistent than supplier alliance strategies and competitor alliance strategies. A positive interrelation between customer and supplier alliance strategies and a high persistence of joint supplier and customer alliance strategies are consistent with the advantages of value chain integration in innovation efforts. Prior engagement in horizontal (competitor) alliances increases the propensity to engage in vertical alliance strategies, but this effect only occurs with a longer lag. Overall, our findings suggest that alliance strategies with different partner types are both heterogeneous in persistence and (temporally) interrelated. This suggests that inter-temporal relationships between different types of alliances may be as important as their simultaneous relationship in alliance portfolios.

Keywords: alliance portfolios, persistence and interrelation of alliance strategies, horizontal alliances, vertical alliances, persistence of strategic collaboration, technological innovation

JEL Classification: O30, O32, L13