Agency Hazards and Alliance Portfolios

39 Pages Posted: 11 Oct 2005 Last revised: 8 Apr 2014

See all articles by Jeffrey J. Reuer

Jeffrey J. Reuer

Purdue University - Krannert School of Management

Roberto Ragozzino

University of Liverpool; University of Tennessee


Prior research over several decades has catalogued many positive motives underlying firms' decisions to engage in joint ventures and other forms of alliances. In this empirical analysis, we investigate whether agency problems brought about by the separation of ownership and control also stimulate the development of firms' joint venture portfolios. By focusing on joint ventures, as opposed to diversification in general or acquisitions, we address the recent debate on agency theory's domain. Results from a sample of U.S. manufacturing firms' alliance portfolios offer supporting evidence, and comparable findings are obtained for international and domestic joint ventures. Agency hazards are also found to bring about extensions of firms' nonequity alliance portfolios in both the international and domestic settings.

Keywords: Joint ventures, strategic alliances, agency theory, ownership structure

JEL Classification: G3

Suggested Citation

Reuer, Jeffrey J. and Ragozzino, Roberto, Agency Hazards and Alliance Portfolios. Reuer, J. and Ragozzino, R. Agency Hazards and Alliance Portfolios. 2006. Strategic Management Journal, Vol. 27: 27-43 . Available at SSRN:

Jeffrey J. Reuer (Contact Author)

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Roberto Ragozzino

University of Liverpool ( email )

Chatham Street
Liverpool, L69 7ZA
United Kingdom

HOME PAGE: http://

University of Tennessee ( email )

The Boyd Center for Business and Economic Research
Knoxville, TN 37996
United States


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