We investigate whether firms learn to manage interfirm alliances as experience accumulates. We use contract-specific experience measures in a data set of over 2000 joint ventures and licensing agreements, and value creation measures derived from the abnormal stock returns surrounding alliance announcements. Learning effects are identified from the effects of unobserved heterogeneity in alliance capabilities. We find evidence of large learning effects in managing joint ventures, but no such evidence for licensing contracts. The effects of learning on value creation are strongest for research joint ventures, and weakest for marketing joint ventures. These results are consistent with the view that learning effects are more important in situations characterized by greater contractual ambiguity. Copyright © 2000 John Wiley & Sons, Ltd.

We link the exploration–exploitation framework of organizational learning to a technology venture’s strategic alliances and argue that the causal relationship between the venture’s alliances and its new product development depends on the type of the alliance. In particular, we propose a product development path beginning with exploration alliances predicting products in development, which in turn predict exploitation alliances, and that concludes with exploitation alliances leading to products on the market. Moreover, we argue that this integrated product development path is moderated negatively by firm size. As a technology venture grows, it tends to withdraw from this product development path to discover, develop, and commercialize promising projects through vertical integration. We test our model on a sample of 325 biotechnology firms that entered 2565 alliances over a 25-year period. We find broad support for the hypothesized product development system and the moderating effect of firm size. Copyright © 2004 John Wiley & Sons, Ltd. Strategic alliances are a ubiquitous phenomenon, especially in high-technology industries (Hagedoorn, 1993). Parallel to the rise in interfirm cooperation, research on strategic alliances has burgeoned, with one strand focusing on the performance impact of alliances on the focal firm (Gulati, 1998). In this line of inquiry, several scholars have studied the relationship between a firm’s strategic alliances and its innovative performance or new product development (Shan, Walker, and

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This paper investigates the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms. We show that alliance outcomes vary systematically across link and scale alliances. Link alliances are interfirm partnerships to which partners contribute different capabilities, while scale alliances are partnerships to which partners contribute similar capabilities. We find that partners are more likely to reorganize or take over link alliances than scale alliances. By contrast, scale alliances are more likely to continue without material changes. The two types of alliances are equally likely to shut down, at similar ages. These results support the view that link alliances lead to greater levels of learning and capability acquisition between the partners than do scale alliances. Copyright © 2000 John Wiley & Sons, Ltd. This study investigates the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms. We define strategic alliances as arrangements between two or more

Based on a study of knowledge transfer within more than 15 industries, across three forms of governance, and between both domestic and international R&D partners, knowledge transfer success was found to be associated with several key variables, and to hinge upon (a) both R&D units’ understanding where the desired knowledge resides within the source, (b) the extent to which the parties share similar knowledge bases, and the extent of interactions between the source and the recipient to (c) transfer the knowledge and (d) participate in an articulation process through which the source’s knowledge is made accessible to the recipient.

This paper proposes and tests a model of IJV learning and performance that segments absorptive capacity into the three components originally proposed by Cohen and Levinthal (1990). First, trust between an IJV’s parents and the IJV’s relative absorptive capacity with its foreign parent are suggested to influence its ability to understand new knowledge held by foreign parents. Second, an IJV’s learning structures and processes are proposed to influence its ability to assimilate new knowledge from those parents. Third, the IJV’s strategy and training competence are suggested to shape its ability to apply the assimilated knowledge. Revisiting the Hungarian IJVs studied by Lyles and Salk (1996) 3 years later, we find support for the knowledge understanding and application predictions, and partial support for the knowledge assimilation prediction. Unexpectedly, our results suggest that trust and management support from foreign parents are associated with IJV performance but not learning. Our model and results offer a new perspective on IJV learning and performance as well as initial insights into how those relationships change over time. Copyright © 2001 John Wiley & Sons, Ltd. Over the past two decades there has been a surge in the number of international joint ventures (IJVs)

Spillovers of Copper Interconnect Technology for Semiconductor Chips Based on a case study of copper interconnect technology, I propose three kinds of absorptive capacity exist: disciplinary, domain-specific and encoded. Each depends upon distinct mechanisms and organizational tradeoffs. Absorbing disciplinary research requires a firm to actively contribute to the scientific community, while protecting its domain-specific knowledge. Absorbing domain-specific knowledge requires the firm to influence the external environment to produce such knowledge, and to hire people who possess it. Absorbing encoded knowledge requires close ties with partners to internalize bundles of routines from them. Both a firm’s internal R&D and its social networks play interrelated roles in building absorptive capacity. (100 words)

0238820). All views expressed are ours and do not necessarily represent those of the funding organizations. INTERNATIONAL JOINT VENTURES AND THE VALUE OF GROWTH OPTIONS Real options theory predicts that international joint ventures (IJVs) confer valuable growth options to firms, yet there has been no direct evidence on whether firms actually capture growth option value from such investments or under what conditions. We bridge the gap between theory and evidence by empirically testing this prediction, and we also develop the theoretical arguments that an IJV’s ownership structure, product market focus, and geographic location are important contingencies affecting the value of embedded growth options. The empirical evidence confirms that IJVs do enhance firms ’ growth option values, but only under certain circumstances. Specifically, minority IJVs and diversifying IJVs contribute to growth option value, but other types of IJVs do not. The findings also challenge recent claims on the growth option value of investments in emerging economies. Key words: International joint ventures; real options theory; growth option value; international

Exploring how organizational antecedents affect potential and realized absorptive capacity, this study identifies differing effects for both components of absorptive capacity. Results indicate that organizational mechanisms associated with coordination capabilities (cross-functional interfaces, participation in decision making, and job rotation) primarily enhance a unit’s potential absorptive capacity. Organizational mechanisms associated with socialization capabilities (connectedness and socialization tactics) primarily increase a unit’s realized absorptive capacity. Our findings reveal why units may have difficulty managing levels of potential and realized absorptive capacity and vary in their ability to create value from their absorptive capacity. The turbulence of the business environment has ensured focused attention on knowledge as a dominant source of competitive advantage. To survive selection pressures, firms need to recognize new external knowledge, assimilate it, and apply it to commercial ends. This ability, referred to as absorptive capacity (Cohen & Levinthal, 1990), has emerged as an underlying theme in strategy and organization research. Recent research has focused on the role of absorptive capacity in innovation

Transaction cost economics, neoclassical economics, and the firm capabilities literatures propose theories of the firm that typically depict firm boundaries determined by a dichotomous choice: the make or buy decision. However, none of these theories presents a satisfying explanation as to why firms would concurrently source, i.e., simultaneously make and buy the same good. This study combines these organizational economics theories and compares when firms make, buy, and concurrently source through surveying small manufacturing firms. Support was shown for aspects of all three theories, with evidence indicating that concurrent sourcing is a distinctly different choice, rather existing along a make/buy continuum. Copyright © 2007 John Wiley & Sons, Ltd.