A Two-Sided Matching Approach for Partner Selection and Assessing Complementarities in Partners’ Attributes in Inter-Firm Alliances

52 Pages Posted: 11 Dec 2014

See all articles by Denisa Mindruta

Denisa Mindruta

HEC Paris - Strategy & Business Policy

Mahka Moeen

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Rajshree Agarwal

University of Maryland - Robert H. Smith School of Business

Date Written: November 22, 2014

Abstract

Strategic alliances are undertaken to create value through complementarities of resources and capabilities of the partner firms. We develop a matching framework to study strategic alliances, taking a market perspective that explicitly incorporates key features of transactions in strategic alliances: two sided decision making in voluntary collaboration; quest for complementarities between indivisible and heterogeneous partner attributes; and competition on each side for partners on the other side. We assess the relative performance of matching models and binary choice models when estimating parameters within simulations based on a known functional relationship. Within the context of research alliances in the bio-pharmaceutical industry, we hypothesize and find support using the matching model framework for complementarity in partner size, and in upstream research capabilities.

Keywords: alliances, two-sided matching, maximum score estimator, bio-pharmaceutical industry, complementarity

Suggested Citation

Mindruta, Denisa and Moeen, Mahka and Agarwal, Rajshree, A Two-Sided Matching Approach for Partner Selection and Assessing Complementarities in Partners’ Attributes in Inter-Firm Alliances (November 22, 2014). Strategic Management Journal, Forthcoming; HEC Paris Research Paper No. SPE-2014-1068; Robert H. Smith School Research Paper No. RHS 2536109. Available at SSRN: https://ssrn.com/abstract=2536109

Denisa Mindruta

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

Mahka Moeen

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Rajshree Agarwal (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

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