Looking Inside the Pipes: The Effect of Resource Flow Dependencies in Alliance Portfolios

Abstract

In this research we investigate how magnitude and direction of resource flows between a firm and its alliance portfolio as well as the complementary nature of resources affect firm performance. Building on the resource dependence theory, we develop and test arguments on a sample of 59 firms in the U.S. passenger airline industry during 1998-2011. We find that dependencies between a focal firm and its alliance portfolio — assessed by access to complementary resources, by power imbalance, by mutual dependence, and by interactions between complementary resource access and mutual dependence — affect firm performance in different ways, which has implications for the management of alliance portfolios.

Keywords: alliance; portfolio; resource flows; performance; resource dependence theory