Alliance formation propensity in the global chemical-pharmaceutical industry

Farok Contractor, Sam Beldona, Changsu Kim

Research output: Contribution to conferencePaperpeer-review

1 Scopus citations


Alliance strategy increasingly uses an entire industry network, rather than examining dyadic relationships, as the unit of analysis. This paper proposes a model which predicts the propensity of any pair of firms to form an alliance, based on their position in a technological and interorganizational industry network. Firmlevel studies, without taking into account the identities of partners, and dyad-level studies, without identifying an affiliated network, can be complemented by the approach taken in our study which treats ties (and links) in a network context. Data are drawn from two data sets, one on alliances and the other on patent citations. Results from a sample of 497 alliances over a 11 year period in the global chemical and pharmaceutical sector suggest that technological similarity (measured by cross patent citations), structural equivalence (measured by the degree of sharing common third-party technology sources), and prior alliance ties statistically explain the propensity of a pair of firms in the network to form an alliance. The results also support our hypothesis that alliance ties and technology links are intertwined at a network level and, thereby, affect the likelihood of forming an alliance with a particular partner.

Original languageEnglish (US)
StatePublished - 2005
Event65th Annual Meeting of the Academy of Management, AOM 2005 - Honolulu, HI, United States
Duration: Aug 5 2005Aug 10 2005


Other65th Annual Meeting of the Academy of Management, AOM 2005
Country/TerritoryUnited States
CityHonolulu, HI

All Science Journal Classification (ASJC) codes

  • Information Systems and Management


  • Alliance
  • Global
  • Networks


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