SOCIAL-STRUCTURE AND ALLIANCE FORMATION PATTERNS - A LONGITUDINAL ANALYSIS

This study explores how social structure affects interfirm alliance fo rmation patterns. It proposes that the social context emerging from pr ior alliances and considerations of strategic interdependence influenc e partnership decisions between firms. This social network facilitates new alliances by providing valuable information to firms about the sp ecific capabilities and reliability of potential partners. The role of both direct ties between firms and their overall networks were examin ed with comprehensive longitudinal multi-industry data on the formatio n of interfirm strategic alliances between 1970 and 1989. Results are consistent with both strategic interdependence and social structural e xplanations of alliance formation. Support for the interaction of the two sets of factors also emerged. The implications of incorporating bo th sets of explanations for the formation of interorganizational ties are discussed.