Structuring interorganizational cooperation : the role of economic integration in strategic alliances
By: LUO, Yadong
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ArticlePublisher: Chichester, UK : John Wiley, June 2008Strategic Management Journal 29, 6, p. 617-637Abstract: This study addresses a new dimension that describes interdependence between alliance members, namely, economic integration-the extent to which resources contributed by different alliance members and subsequent operations using these resources are effectively blended into an alliance's value chain to the point where if one member withdraws, the remaining member(s) suffer great loss. We posit that economic integration has a linear positive effect on alliance stability but a curvilinear (diminished) effect on alliance profitability. Moreover, when economic integration is stronger, other dyadic variables such as interparty trust, joint governance and procedural justice will have a greater effect on alliance performance. Analysis of 198 cross-cultural strategic alliances in an emerging market generally supports these propositions
This study addresses a new dimension that describes interdependence between alliance members, namely, economic integration-the extent to which resources contributed by different alliance members and subsequent operations using these resources are effectively blended into an alliance's value chain to the point where if one member withdraws, the remaining member(s) suffer great loss. We posit that economic integration has a linear positive effect on alliance stability but a curvilinear (diminished) effect on alliance profitability. Moreover, when economic integration is stronger, other dyadic variables such as interparty trust, joint governance and procedural justice will have a greater effect on alliance performance. Analysis of 198 cross-cultural strategic alliances in an emerging market generally supports these propositions
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