GULATI, RANJAY; PHD

                         HARVARD UNIVERSITY, 1993

                         This dissertation examines the factors that influence firm participation in strategic alliances. It shows that
                         the network of existing alliances in which most firms find themselves embedded constitutes a form of
                         'social capital' and plays a major role in explaining their subsequent alliance behavior--a crucial factor
                         overlooked in prior research. Such a socially informed explanation for alliance behavior does not
                         preclude the role of economic determinants. I argue that the quest for complementary assets is indeed
                         an important determinant of alliance formation. However, I point out that the interests of important
                         determinant firms in such arrangements, and the opportunities firms perceive to realize those interests,
                         are shaped by the availability of information about the capabilities and reliability of potential partners. This
                         information is channeled through the firm's network of prior alliances, which as a result, also moderates
                         the alliance decisions of firms. In this study, a firm's social capital encompasses both its direct and indirect
                         relationships with other firms. The underlying network of ties examined here is not some stationary
                         external network, but is constantly evolving and is closely linked to the actions themselves--since the
                         formation of an alliance in a given year modifies the very system of relations by which it is determined.
                         Observing the effect of such a dynamic process necessitates a systematic longitudinal study of firm
                         actions, and the co-evolution of the social network within which firms are embedded. Within this
                         dissertation I empirically assess the relative significance of alternative factors that explain the alliance
                         decisions by a large sample of firms over the last decade. Three components of alliance behavior are
                         examined separately: (1) Which firms enter into alliances? (2) With whom do firms form alliances? (3) What
                         kinds of contracts do firms use to govern their alliances? I examine these issues using a comprehensive
                         dataset of the alliance behavior of the largest firms across three sectors between 1970-1989. While each
                         of the chapters offers an independent empirical analysis, there is some overlap in the theoretical reviews
                         offered. Supplementing the quantitative analysis were extensive field interviews at a number of
                         organizations. While the results of the field-based study are not formally reported here, it had an
                         important input into the quantitative study.


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