Alliance Portfolios and Firm Performance: A Study of Value Creation and Appropriation in the U.S. Software Industry

Strategic Management Journal, Vol. 28, No. 12, pp. 1187-1212, 2007

McCombs Research Paper Series No. OSSM-03-08

52 Pages Posted: 13 May 2007 Last revised: 31 Aug 2014

See all articles by Dovev Lavie

Dovev Lavie

Bocconi University - Department of Management and Technology

Abstract

This study reveals the multifaceted contribution of alliance portfolios to firms' market performance. Extending prior research that has stressed the value-creation effect of network resources, it uncovers how prominent partners may undermine a firm's capacity to appropriate value from its alliance portfolio. Analysis of a comprehensive panel dataset of 367 software firms and their 20,779 alliances suggests that the contribution of network resources to value creation varies with the complementarity of those resources. Furthermore, the relative bargaining power of partners in the alliance portfolio constrains the firm's appropriation capacity, especially when many of these partners compete in the focal firm's industry. In turn, the firm's market performance improves with the intensity of competition among partners in its alliance portfolio. These findings advance network research by highlighting the tradeoffs that alliance portfolios impose on firms that seek to manage and leverage their alliances.

Keywords: Alliance, Network, Portfolio, Value Creation, Value Appropriation, Performance, Software

Suggested Citation

Lavie, Dovev, Alliance Portfolios and Firm Performance: A Study of Value Creation and Appropriation in the U.S. Software Industry. Strategic Management Journal, Vol. 28, No. 12, pp. 1187-1212, 2007, McCombs Research Paper Series No. OSSM-03-08, Available at SSRN: https://ssrn.com/abstract=985878

Dovev Lavie (Contact Author)

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
994
Abstract Views
4,499
Rank
44,298
PlumX Metrics