Interorganizational alliances and the performance of firms: A study of growth and innovation rates in a high-technology industry

This paper investigates the relationship between intercorporate technology alliances and firm performance. It argues that alliances are access relatio nships and therefore that the advantages which a focal firm derives from a portfolio of strategic coalitions depend upon the resource profiles of its alliance partners. In particular large firms and those that possess leading -edge technological resources are posited to be the most valuable associate s. The paper also argues that alliances are both pathways for the exchange of resources and signals that convey social status and recognition. Particu larly when one of the firms in an alliance is a young or small organization or, more generally an organization of equivocal quality, alliances can act as endorsements: they build public confidence in the value of an organizat ion's products and services and thereby facilitate the firn's efforts to at tract customers and other corporate partners. The findings from models of s ales growth and innovation rates in a large sample of semiconductor produce rs confirm that organizations with large and innovative alliance partners p erform better than otherwise comparable firms that lack such partners. Cons istent with the status-transfer arguments, the findings also demonstrate th at young and small firms benefit more from large and innovative strategic a lliance partners than do old and large organizations. Copyright (C) 2000 Jo hn Wiley & Sons, Ltd.