The intra‐alliance division of value created through collaboration

TLDR

Strategic alliances’ impact depends on how benefits are distributed among partners, yet no explicit theory of intra‑alliance value division exists and empirical studies face methodological challenges. The study proposes a bargaining framework and a measure to capture intra‑alliance value appropriation. The authors develop a bargaining framework and a metric to quantify intra‑alliance value appropriation. Testing 200 biotech R&D alliances, the framework explains variation in value appropriation across partners, partner types, and individual firms. © 2010 John Wiley & Sons, Ltd.

Abstract

Abstract The differential benefits reaped by individual partners are a major determinant of the impact of strategic alliances on firm performance and an important (dis)incentive for alliance partners to collaborate in value creation. Theoretically, we lack an explicit theory of intra‐alliance value division; empirically, previous analysis has been hampered by methodological challenges. We propose a bargaining framework for intra‐alliance value appropriation, as well as a measure for capturing its variation. We test our hypotheses on a sample of 200 biotechnology R&D alliances, and are able to explain variation in value appropriation across alliance partners, partner types, and individual firms of each type. Copyright © 2010 John Wiley & Sons, Ltd.