Title: Alliance formation propensity in a global industry network

Authors: Farok J. Contractor; Sam Beldona; Changsu Kim

Addresses: Department of Management and Global Business, School of Business, Rutgers University, 1 Washington Park, Newark, NJ 07102, USA. ' Department of Management, College of Business, Bryant University, 1150 Douglas Pike, Smithfield, RI 02917, USA. ' Sogang Business School, Sogang University, Shinsu-dong 1, Mapo-Gu, Seoul, 121-742, Korea

Abstract: What factors determine which firms in an industry ally with each other? This paper analyses a sample of 497 alliances, in ten countries, in the global pharmaceutical sector where alliances are prolific and central to corporate strategy. The results suggest that direct technological commonality (measured by cross patent citations between each pair), indirect commonality (measured by the degree to which they share common third-party technology sources), and prior alliance ties statistically explain the propensity that any two firms in a network will form an alliance. We also explore cross-border effects to see if companies originating in different nations are more likely, or less likely, to form alliances because of their national origins.

Keywords: alliance formation; industry networks; global pharmaceutical industry; patent citations; patents; strategic alliances; technological commonality; indirect commonality; prior alliance ties; cross-border effects.

DOI: 10.1504/IJSBA.2011.044858

International Journal of Strategic Business Alliances, 2011 Vol.2 No.4, pp.245 - 270

Available online: 12 Jan 2012 *

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