Host Country Network, Industry Experiences, and International Alliance Formation: Experience from the Venture Capital Industry
Journal of World Business, 51(2): 264-277 (2016)
14 Pages Posted: 5 Feb 2016 Last revised: 22 Nov 2017
Date Written: 2016
Integrating resource dependence and social network theories, we investigate how foreign firms’ position in alliance network in host country influences their further allying with firms from the host and home countries. We introduce network centrality as a factor that influences two competing forces in alliance formation: willingness and attractiveness. Furthermore, we argue that foreign firms suffering from a low network centrality may find it easier to enhance their network position if they have industry experience. Our analysis of data on US venture capital firms’ investment in China supports our theoretical framework. Theoretical and managerial implications of our findings are discussed.
Keywords: International alliance formation; Network centrality; Venture capital; Industry experience; Resource dependence theory; Social network theory
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