RESOURCE-BASED VIEW OF STRATEGIC ALLIANCE FORMATION - STRATEGIC AND SOCIAL EFFECTS IN ENTREPRENEURIAL FIRMS

Why do firms form strategic alliances? The traditional theoretical ans wer has been transaction cost explanations. Yet, these explanations wh ich center on transaction characteristics, static efficiency, and rout ine situations do not capture the strategic and social factors which p ropel many firms into alliance formation. In this study, however, we c ombine these alternative social and strategic explanations for allianc e formation. Consistent with these explanations, we find that alliance s form when firms are in vulnerable strategic positions either because they are competing in emergent or highly competitive industries or be cause they are attempting pioneering technical strategies. We also fin d that alliances form when firms are in strong social positions such t hat they are led by large, experienced, and well-connected top managem ent teams. The underlying logic of alliance formation is, thus, strate gic needs and social opportunities. We develop these findings by exten ding the resource-based view of the firm to alliance formation and the n examining the resulting hypotheses using product development allianc es. The study is longitudinal and focuses on entrepreneurial semicondu ctor firms. Overall, strategic and social explanations of organization al phenomena as well as industry, firm, and top management team factor s emerge as central in the paper. This suggests that these factors are relevant for predicting alliance formation, especially in high-veloci ty industries such as semiconductors. We conclude that failure to incl ude serial and strategic explanations creates an impoverished view of alliance formation.