Choosing an appropriate alliance governance mode: The role of institutional, cultural and geographical distance in international research & development (R&D) collaborations

Jeongho Choi and Farok J Contractor
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Jeongho Choi: Department of Management and Global Business, Rutgers University, Newark, NJ, USA
Farok J Contractor: Rutgers Business School, Rutgers University, Newark, NJ, USA

Journal of International Business Studies, 2016, vol. 47, issue 2, 210-232

Abstract: We identify a variety of R&D alliance modes in a knowledge-intensive industry (e.g., Pharmaceuticals), and classify them into four ordered categories which go beyond the traditional binary equity vs non-equity alliance classification. This enriches our understanding of alliance governance structures and broadens the application of alliance modes in what is today a more complicated international R&D collaboration setting. We then explore national, industry and firm factors that determine the selection of an appropriate R&D alliance governance mode, using a sample of 237 international alliance deals. The likelihood of using a more-integrated alliance governance mode decreases as the difference or “distance” between nations of the partner firms increases in terms of human capital and cultural distance. On the other hand, a greater geographic and institutional difference is positively associated with the selection of more integrated alliance governance modes. Furthermore, firms in the research stage are more likely to use a more-integrated governance mode, as opposed to firms in the development stage. These findings advance research on alliance governance structure. They reveal the factors affecting the R&D alliance governance mode choice.

Date: 2016
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