Abstract
The strategic importance of learning and knowledge development in alliances has been widely recognized and discussed in literature, though focusing mainly from the view of the demand side and leaving the equally important ingredient of knowledge owners’ incentives-to-teach intact. This paper blends the perspectives of the transaction-costs economics (TCE) and the knowledge-based view (KBV) in a hypothesized governance model that illustrates how knowledge and location factors of international partners jointly impact alliance strategies. We first identify the relevant knowledge and location factors affecting incentives-to-teach in alliances, and then incorporated them into a framework explaining the choice of contractual or equity-based mode governing an alliance. Eight hypotheses are developed and then tested on a sample of 640 international alliances, with at least a partner from a focal emerging economy, Taiwan. Our research findings show that the contractual mode is usually aligned with higher incentives-to-teach of the knowledge owners, especially in knowledge-asymmetric and location-symmetric alliances. In a contrast, the equity-based mode, offering additional safeguarding mechanisms for the knowledge owner, is often selected in the alliances associated with a severe concern of competition, especially in knowledge-symmetric and location-asymmetric alliances.
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Notes
The following four steps were used for selecting the initial sample extracted from the SDC database: (1) Taiwan as the focal emerging economy: 1,565 alliances, participated by at least one Taiwanese partner; (2) alliance status: 942 signed and completed plus 1 extended alliances, after excluding 622 alliances with the other status of pending, LOI, renegotiated, rumor, and terminated; (3) international partners: 849 international alliances, after excluding 84 domestic alliances (without any foreign parent) and ten subsidiary alliances (without any Taiwanese parent); (4) data cleansing: 843 Taiwanese alliances, after excluding one knowledge-unknown alliance (without the SIC code of alliance) and five duplicated alliances (with identical applicable data except the source of news).
The percentages of each location factor in the full-sample are reported in the parentheses: Taiwan (48%), non-Taiwan emerging economies (28%), North America (14%), Japan (5%), Europe (4%), supernational (11%), and multiple locations (30%), when the alliance is located in multiple economies.
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We are grateful to David Ahlstrom (Senior Editor of APJM) and two reviewers for their constructive comments. The earlier manuscripts of this paper were presented at the 2007 Annual Meetings of Academy of International Business (AIB) in Indianapolis, Academy of Management (AOM) in Philadelphia, and Strategic Management Society (SMS) in San Diego. All the comments received from the reviewers and conferences are much appreciated.
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Wen, S.H., Chuang, CM. To teach or to compete? A strategic dilemma of knowledge owners in international alliances. Asia Pac J Manag 27, 697–726 (2010). https://doi.org/10.1007/s10490-008-9127-y
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DOI: https://doi.org/10.1007/s10490-008-9127-y