Governance structure choice in strategic alliances

Abstract

PurposeStrategic alliances have a variety of governance structures that can be broadly classified as joint ventures, minority equity alliances, and contractual alliances. This paper seeks to empirically examine the roles of four key determinants of governance structure choice, namely, joint R&D and joint marketing objectives, alliance management experience, and international partners.Design/methodology/approachSeveral hypotheses are developed regarding governance structure choice and are tested with data from 765 alliances. A multinomial logistic regression (logit) model is used for statistical analysis, with five control variables.FindingsAll hypotheses are supported, so that the roles of alliance objectives, alliance management experience, and international partners are demonstrated as being significant as determinants of governance structure choice in alliances.Research limitations/implicationsLimitations stem from the data being from a single source, one that also relies on press announcements that may be biased toward larger alliances.Practical implicationsBriefly, alliance managers should find it useful to assess the relative presence of the four determinants of structural choice studied in this investigation in order to make an informed selection of the appropriate governance structure.Originality/valueThe study contributes to the knowledge of the key determinants of governance structure choice in strategic alliances by examining empirically, with a large sample of alliances from various industries, the significant roles of four factors, namely, joint R&D and joint marketing objectives, alliance management experience, and international partners.