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Information gathering through alliances

Wilko Letterie (), John Hagedoorn, Hans van Kranenburg and Franz Palm

Journal of Economic Behavior & Organization, 2008, vol. 66, issue 2, 176-194

Abstract: The effect of a firm's uncertainty regarding technological development on the formation of alliances is examined, and it is shown that this uncertainty is positively related to the number of alliances. However, higher uncertainty also makes the firm less likely to ally with others if the collected information is redundant. The higher the similarity between the technological regimes of potential alliance partners, the lower the incentive to ally. Also direct ties are preferred to indirect ones if uncertainty is high since direct ties yield more accurate information than indirect ties.

Date: 2008
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