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Contractual heterogeneity in strategic alliances

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  • Reuer, Jeffrey J.

    (Ohio State University)

  • Ariño, Africa

    ()
    (IESE Business School)

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    Abstract

    We investigate firms' alliance design choices by examining alliances as multifaceted contractual forms. The analysis explores the contractual heterogeneity underlying alternative governance structures for alliances, the bundling of different contractual provisions, and the dimensionality of the contractual completeness construct. The empirical evidence indicates that the complexity of collaborative agreements ­in terms of the number and stringency of provisions­ is greater for alliances that are strategically important and that involve high levels of asset specificity. Factor analysis of tetrachoric correlations among eight contractual provisions reveals two distinct dimensions of contractual completeness. Partners with prior collaborative relationships tend to institute fewer contractual provisions for monitoring and control of an alliance. Relative to open-ended contractual agreements, time-bound alliances tend to rely less heavily on such provisions, but more so on safeguards concerning confidential and proprietary information, alliance termination, and the adjudication of disputes by third parties.

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    Bibliographic Info

    Paper provided by IESE Business School in its series IESE Research Papers with number D/482.

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    Length: 27 pages
    Date of creation: 13 Nov 2002
    Date of revision:
    Handle: RePEc:ebg:iesewp:d-0482

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    Postal: IESE Business School, Av Pearson 21, 08034 Barcelona, SPAIN
    Web page: http://www.iese.edu/
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    Related research

    Keywords: alliance design; governance structures; collaborative agreements; alliance termination;

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    Cited by:
    1. Marco Furlotti, 2007. "There is more to contracts than incompleteness: a review and assessment of empirical research on inter-firm contract design," Journal of Management and Governance, Springer, vol. 11(1), pages 61-99, March.

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