Financial slack and venture managers' decisions to seek a new alliance
AbstractWe examine two distinct perspectives to analyze the role of financial slack in the decisions of technology venture managers to seek strategic alliances. According to the capabilities perspective, financial slack provides managers with the ability to maximize the benefits from acquiring missing capabilities through alliance formation, whereas according to the resource dependence perspective, financial slack buffers the managers' motivations to seek alliances as a reaction to external environmental scarcity. Drawing on an experimental design and data on 1632 decisions nested within 51 managers, we find support for a combined perspective demonstrating that managerial discretion in the form of financial slack moderates how internal capabilities and context encourage managers to seek alliances. We discuss implications of our work for the alliance literature.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Business Venturing.
Volume (Year): 23 (2008)
Issue (Month): 4 (July)
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Web page: http://www.elsevier.com/locate/jbusvent
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- Morgan, Horatio M., 2013. "Equity-based Financial Slack and New Venture Performance: Evidence from matched single-founder ventures," MPRA Paper 50291, University Library of Munich, Germany.
- Haeussler, Carolin & Patzelt, Holger & Zahra, Shaker A., 2012. "Strategic alliances and product development in high technology new firms: The moderating effect of technological capabilities," Journal of Business Venturing, Elsevier, vol. 27(2), pages 217-233.
- Morgan, Horatio M., 2013. "Equity-based Financial Slack and New Venture Performance: Evidence from matched single-founder ventures," MPRA Paper 50325, University Library of Munich, Germany.
- Basu, Sandip & Phelps, Corey & Kotha, Suresh, 2011. "Towards understanding who makes corporate venture capital investments and why," Journal of Business Venturing, Elsevier, vol. 26(2), pages 153-171, March.
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