IDEAS home Printed from https://ideas.repec.org/a/eee/worbus/v50y2015i3p535-547.html
   My bibliography  Save this article

How the alliance pie is split: Value appropriation by each partner in cross-border technology transfer alliances

Author

Listed:
  • Contractor, Farok J.
  • Woodley, James A.

Abstract

Almost no academic papers treat a crucial aspect of alliances – the determinants of the division of alliance value over the partners. Analyzing a sample of cross-border alliances, technology providing partners increase their share of total alliance returns when accepting riskier forms of compensation. Returns to a partner, and the risk they assume, are shown to be correlated through minimum sales or minimum royalty agreement clauses. Firms with stronger technical capabilities gain more from technology alliances. The bargaining power wielded by each party, while negotiating the structure of an alliance, influences each partner's share of overall alliance benefits.

Suggested Citation

  • Contractor, Farok J. & Woodley, James A., 2015. "How the alliance pie is split: Value appropriation by each partner in cross-border technology transfer alliances," Journal of World Business, Elsevier, vol. 50(3), pages 535-547.
    • Handle: RePEc:eee:worbus:v:50:y:2015:i:3:p:535-547
    DOI: 10.1016/j.jwb.2014.08.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1090951614000601
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jwb.2014.08.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sugato Bhattacharyya & Francine Lafontaine, 1995. "Double-Sided Moral Hazard and the Nature of Share Contracts," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 761-781, Winter.
    2. Reuer, Jeffrey J. & Arino, Africa & Mellewigt, Thomas, 2006. "Entrepreneurial alliances as contractual forms," Journal of Business Venturing, Elsevier, vol. 21(3), pages 306-325, May.
    3. Li, Jing & Zhou, Changhui, 2008. "Dual-edged tools of trade: How international joint ventures help and hinder capability building of Chinese firms," Journal of World Business, Elsevier, vol. 43(4), pages 463-474, October.
    4. Randi Lunnan & Sven A. Haugland, 2008. "Predicting and measuring alliance performance: a multidimensional analysis," Strategic Management Journal, Wiley Blackwell, vol. 29(5), pages 545-556, May.
    5. Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(4), pages 625-645, December.
    6. Nooteboom, B. & Berger, H. & Noorderhaven, N.G., 1997. "Effects of trust and governance on relational risk," Other publications TiSEM 8e83932e-064c-40e8-afe7-4, Tilburg University, School of Economics and Management.
    7. Shige Makino & Andrew Delios, 1996. "Local Knowledge Transfer and Performance: Implications for Alliance Formation in Asia," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(5), pages 905-927, December.
    8. Laura Poppo & Kevin Zheng Zhou, 2014. "Managing contracts for fairness in buyer–supplier exchanges," Strategic Management Journal, Wiley Blackwell, vol. 35(10), pages 1508-1527, October.
    9. J. F. Wright, 1965. "Some Reflections On The Place Of Discrimination In The Theory Of Monopolistic Competition," Oxford Economic Papers, Oxford University Press, vol. 17(2), pages 175-187.
    10. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
    11. Yadong Luo & Oded Shenkar & Mee-Kau Nyaw, 2001. "A Dual Parent Perspective on Control and Performance in International Joint Ventures: Lessons From a Developing Economy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(1), pages 41-58, March.
    12. Africa Ariño & Peter Smith Ring, 2010. "The role of fairness in alliance formation," Strategic Management Journal, Wiley Blackwell, vol. 31(10), pages 1054-1087, October.
    13. Hagigi, Moshe & Sivakumar, Kumar, 2009. "Managing diverse risks: An integrative framework," Journal of International Management, Elsevier, vol. 15(3), pages 286-295, September.
    14. Yadong Luo, 2007. "Are joint venture partners more opportunistic in a more volatile environment?," Strategic Management Journal, Wiley Blackwell, vol. 28(1), pages 39-60, January.
    15. Mona V. Makhija & Usha Ganesh, 1997. "The Relationship Between Control and Partner Learning in Learning-Related Joint Ventures," Organization Science, INFORMS, vol. 8(5), pages 508-527, October.
    16. Luo, Yadong, 2009. "Are we on the same page?: Justice agreement in international joint ventures," Journal of World Business, Elsevier, vol. 44(4), pages 383-396, October.
    17. David J. Teece, 2008. "Technology Transfer By Multinational Firms: The Resource Cost Of Transferring Technological Know-How," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 1, pages 1-22, World Scientific Publishing Co. Pte. Ltd..
    18. Hsieh, Linda H.Y. & Rodrigues, Suzana B. & Child, John, 2010. "Risk perception and post-formation governance in international joint ventures in Taiwan: The perspective of the foreign partner," Journal of International Management, Elsevier, vol. 16(3), pages 288-303, September.
    19. Kim, Chang-Su & Inkpen, Andrew C., 2005. "Cross-border R&D alliances, absorptive capacity and technology learning," Journal of International Management, Elsevier, vol. 11(3), pages 313-329, September.
    20. J Michael Geringer & Louis Hebert, 1991. "Measuring Performance of International Joint Ventures," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(2), pages 249-263, June.
    21. Prashant Kale & Harbir Singh, 2007. "Building firm capabilities through learning: the role of the alliance learning process in alliance capability and firm‐level alliance success," Strategic Management Journal, Wiley Blackwell, vol. 28(10), pages 981-1000, October.
    22. Jeffrey H. Dyer & Harbir Singh & Prashant Kale, 2008. "Splitting the pie: rent distribution in alliances and networks," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(2-3), pages 137-148.
    23. Merchant, Hemant, 2005. "The structure-performance relationship in international joint ventures: a comparative analysis," Journal of World Business, Elsevier, vol. 40(1), pages 41-56, February.
    24. Child, John & Yan, Yanni, 1999. "Investment and control in international joint ventures: the case of China," Journal of World Business, Elsevier, vol. 34(1), pages 3-15, April.
    25. Joanne Oxley & Tetsuo Wada, 2009. "Alliance Structure and the Scope of Knowledge Transfer: Evidence from U.S.-Japan Agreements," Management Science, INFORMS, vol. 55(4), pages 635-649, April.
    26. Contractor, Farok J. & Ra, Wonchan, 2000. "Negotiating alliance contracts: Strategy and behavioral effects of alternative compensation arrangements," International Business Review, Elsevier, vol. 9(3), pages 271-299, June.
    27. Prashant Kale & Harbir Singh & Howard Perlmutter, 2000. "Learning and protection of proprietary assets in strategic alliances: building relational capital," Strategic Management Journal, Wiley Blackwell, vol. 21(3), pages 217-237, March.
    28. Jiang, Xu & Li, Yuan, 2008. "The relationship between organizational learning and firms' financial performance in strategic alliances: A contingency approach," Journal of World Business, Elsevier, vol. 43(3), pages 365-379, July.
    29. Yadong Luo, 2008. "Procedural fairness and interfirm cooperation in strategic alliances," Strategic Management Journal, Wiley Blackwell, vol. 29(1), pages 27-46, January.
    30. Gary Hamel, 1991. "Competition for competence and interpartner learning within international strategic alliances," Strategic Management Journal, Wiley Blackwell, vol. 12(S1), pages 83-103, June.
    31. Contractor, Farok J. & Ra, Wonchan, 2002. "How knowledge attributes influence alliance governance choices: A theory development note," Journal of International Management, Elsevier, vol. 8(1), pages 11-27.
    32. Williamson, Oliver E, 1983. "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, American Economic Association, vol. 73(4), pages 519-540, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jell-Ojobor, Maria & Hajdini, Ilir & Windsperger, Josef, 2022. "Governance of international franchise networks: Combining value creation and value appropriation perspectives," Journal of Business Research, Elsevier, vol. 139(C), pages 267-279.
    2. Lascaux, Alexander, 2019. "Absorptive Capacity, Research Output Sharing, and Research Output Capture in University-Industry Partnerships," Scandinavian Journal of Management, Elsevier, vol. 35(3).
    3. Zakrzewska-Bielawska, Agnieszka & Czakon, Wojciech & Kraus, Sascha, 2023. "Relational orientation in B2B strategies: Measurement scale development and validation," Journal of Business Research, Elsevier, vol. 160(C).
    4. Luis Lages & Antonin Ricard & Aurélie Hemonnet-Goujot & Anne‐marie Guerin, 2020. "Frameworks for innovation, collaboration, and change: Value creation wheel, design thinking, creative problem‐solving, and lean," Post-Print hal-02734810, HAL.
    5. Beamish, Paul W. & Lupton, Nathaniel C., 2016. "Cooperative strategies in international business and management: Reflections on the past 50 years and future directions," Journal of World Business, Elsevier, vol. 51(1), pages 163-175.
    6. Pereira, Vijay & Patnaik, Swetketu & Temouri, Yama & Tarba, Shlomo & Malik, Ashish & Bustinza, Oscar, 2021. "A longitudinal micro-foundational investigation into ambidextrous practices in an international alliance context–A case of a biopharma EMNE," International Business Review, Elsevier, vol. 30(1).
    7. Robson, Matthew J. & Katsikeas, Constantine S. & Schlegelmilch, Bodo B. & Pramböck, Barbara, 2019. "Alliance capabilities, interpartner attributes, and performance outcomes in international strategic alliances," Journal of World Business, Elsevier, vol. 54(2), pages 137-153.
    8. Bernadine J. Dykes & Ikenna Uzuegbunam, 2023. "Foreign partner choice in the public interest: Experience and risk in infrastructure public–private partnerships," Journal of International Business Policy, Palgrave Macmillan, vol. 6(1), pages 47-66, March.
    9. Xie, Xuemei & Liu, Xiaojie & Chen, Jialing, 2023. "A meta-analysis of the relationship between collaborative innovation and innovation performance: The role of formal and informal institutions," Technovation, Elsevier, vol. 124(C).
    10. Zhang, Jing & Pezeshkan, Amir, 2016. "Host country network, industry experience, and international alliance formation: Evidence from the venture capital industry," Journal of World Business, Elsevier, vol. 51(2), pages 264-277.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pak, Yong Suhk & Ra, Wonchan & Park, Young-Ryeol, 2009. "Understanding IJV performance in a learning and conflict mediated context," International Business Review, Elsevier, vol. 18(5), pages 470-480, October.
    2. Michael Nippa & Jeffrey J Reuer, 2019. "On the future of international joint venture research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 555-597, June.
    3. Ali, Tahir & Khalid, Saba & Shahzad, Khuram & Larimo, Jorma, 2021. "Managing international joint ventures to improve performance: The role of structural and social mechanisms," International Business Review, Elsevier, vol. 30(3).
    4. Huang, Ming-Chang & Chiu, Ya-Ping, 2020. "A knowledge tension perspective on management control and performance in international joint ventures," Journal of International Management, Elsevier, vol. 26(4).
    5. Pak, Yong Suhk & Ra, Wonchan & Lee, Jong Min, 2015. "An integrated multi-stage model of knowledge management in international joint ventures: Identifying a trigger for knowledge exploration and knowledge harvest," Journal of World Business, Elsevier, vol. 50(1), pages 180-191.
    6. Xu, Shichun & Hao, Andy, 2021. "Understanding the impact of national culture on firms’ benefit-seeking behaviors in international B2B relationships: A conceptual model and research propositions," Journal of Business Research, Elsevier, vol. 130(C), pages 27-37.
    7. Müller, Dirk, 2010. "Alliance Coordination, Dysfunctions, and the Protection of Idiosyncratic Knowledge in Strategic Learning Alliances," EconStor Preprints 41039, ZBW - Leibniz Information Centre for Economics.
    8. Christoffersen, Jeppe & Plenborg, Thomas & Robson, Matthew J., 2014. "Measures of strategic alliance performance, classified and assessed," International Business Review, Elsevier, vol. 23(3), pages 479-489.
    9. Jane Lu & Xufei Ma, 2015. "Partner resource asymmetry and IJV survival," Asia Pacific Journal of Management, Springer, vol. 32(4), pages 1039-1064, December.
    10. Beamish, Paul W. & Lupton, Nathaniel C., 2016. "Cooperative strategies in international business and management: Reflections on the past 50 years and future directions," Journal of World Business, Elsevier, vol. 51(1), pages 163-175.
    11. Kolloge, Konstantin, 2009. "Die Messung des Kooperationserfolges in der empirischen Forschung: Ergebnisse einer Literaturstudie," Arbeitspapiere 76, University of Münster, Institute for Cooperatives.
    12. Xu, Dean & Lu, Jane W., 2007. "Technological knowledge, product relatedness, and parent control: The effect on IJV survival," Journal of Business Research, Elsevier, vol. 60(11), pages 1166-1176, November.
    13. Michael A Sartor & Paul W Beamish, 2018. "Host market government corruption and the equity-based foreign entry strategies of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(3), pages 346-370, April.
    14. Scaringella, Laurent & Burtschell, François, 2017. "The challenges of radical innovation in Iran: Knowledge transfer and absorptive capacity highlights — Evidence from a joint venture in the construction sector," Technological Forecasting and Social Change, Elsevier, vol. 122(C), pages 151-169.
    15. Stienstra, Miranda, 2020. "The determinants and performance implications of alliance partner acquisition," Other publications TiSEM 7fdee0c2-d4d2-4f5b-95e3-2, Tilburg University, School of Economics and Management.
    16. Ho, Mia Hsiao-Wen & Wang, Fatima, 2015. "Unpacking knowledge transfer and learning paradoxes in international strategic alliances: Contextual differences matter," International Business Review, Elsevier, vol. 24(2), pages 287-297.
    17. Bouncken, Ricarda B. & Fredrich, Viktor & Kraus, Sascha & Ritala, Paavo, 2020. "Innovation alliances: Balancing value creation dynamics, competitive intensity and market overlap," Journal of Business Research, Elsevier, vol. 112(C), pages 240-247.
    18. Hou, Wanrong & Li, Sali & Priem, Richard L., 2013. "How do CEOs matter? The moderating effects of CEO compensation and tenure on equity ownership in international joint ventures," Journal of International Management, Elsevier, vol. 19(2), pages 138-151.
    19. Li, Linwei & Jiang, Feifei & Pei, Yunlong & Jiang, Nengqian, 2017. "Entrepreneurial orientation and strategic alliance success: The contingency role of relational factors," Journal of Business Research, Elsevier, vol. 72(C), pages 46-56.
    20. Koen H. Heimeriks & Geert Duysters, 2007. "Alliance Capability as a Mediator Between Experience and Alliance Performance: An Empirical Investigation into the Alliance Capability Development Process," Journal of Management Studies, Wiley Blackwell, vol. 44(1), pages 25-49, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:worbus:v:50:y:2015:i:3:p:535-547. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.