Business Groups, Networks, And Embeddedness: Innovation And Implementation Alliances In Japanese Electronics, 1985-1998
AbstractThis paper examines the changing process of strategic alliance formation in the Japanese electronics industry between 1985 and 1998. With data on 123-135 Japanese electronics/electrical machinery makers, we use a dyad panel regression methodology to address a series of hypotheses drawn largely from embeddedness theory on how the firmsâ€™ horizontal and vertical keiretsu business group affiliations and prior alliance networks supported and constrained partner choice in new R&D (innovation) and nonR&D (implementation) domestic economy alliances. We find that in the first half of our series (1985-91; the â€œpreburstâ€ period) keiretsu served as infrastructure or platform for new strategic alliances that had both innovation and implementation goals. In the second half of our series (1992-98, the â€œpostbubbleâ€ period) the keiretsu effects on innovation alliance formation were gone, but the groupsâ€™ role in nonR&D or implementation alliances, the purpose of which was often cost reduction, had expanded. Our results suggest that Japanese electronics firms over this interval of time adapted rationally to the heightened uncertainty and stringency of the Japanese domestic economic environment by searching outside their preexisting networks for innovation alliances while at the same time exploiting those networks for implementation alliances addressed to cost-reduction and other operational aims. The study speaks to embeddedness theory in showing that economic actors are not deterministically constrained by business group or other preexisting network ties but may in rational fashion exploit or abandon those ties with an eye to advancing corporate and alliance goals.
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Bibliographic InfoPaper provided by Institute of Industrial Relations, UC Berkeley in its series Institute for Research on Labor and Employment, Working Paper Series with number qt35g695gn.
Date of creation: 02 May 2011
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-28 (All new papers)
- NEP-CSE-2012-03-28 (Economics of Strategic Management)
- NEP-INO-2012-03-28 (Innovation)
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