Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Effect of Contractual Complexity on Technology Sourcing Agreements

Contents:

Author Info

  • Hansen, Zeynep
  • Higgins, Matthew

Abstract

Most research on strategic alliances ignores the underlying contracts that govern the terms of the relationship. This is problematic since it is how these contracts are structured that determines how firms will benefit from a relationship. We present a novel method to analyze contractual complexity in a multi-dimensional framework in an attempt to link together the contractual complexity and control rights literatures. We find that the stage of development, age and prevalence of the underlying technology most influence complexity. Contractual complexity also influences the allocation of control rights. We also explore the importance of prior relationships on the underlying contract.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/4979/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 4979.

as in new window
Length:
Date of creation: 17 Sep 2007
Date of revision:
Handle: RePEc:pra:mprapa:4979

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: Contractual complexity; Control rights; Strategic alliances; Biopharmaceutical industry; Contractual design;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Hart, Oliver D & Moore, John, 1988. "Incomplete Contracts and Renegotiation," Econometrica, Econometric Society, Econometric Society, vol. 56(4), pages 755-85, July.
  2. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 21(2), pages 297-326, October.
  3. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, American Economic Association, vol. 82(4), pages 942-63, September.
  4. Klein, Benjamin & Murphy, Kevin M, 1997. "Vertical Integration as a Self-Enforcing Contractual Arrangement," American Economic Review, American Economic Association, American Economic Association, vol. 87(2), pages 415-20, May.
  5. Bruce A. Heiman & Jack A. Nickerson, 2004. "Empirical evidence regarding the tension between knowledge sharing and knowledge expropriation in collaborations," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(6-7), pages 401-420.
  6. Cheung, Steven N S, 1983. "The Contractual Nature of the Firm," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 26(1), pages 1-21, April.
  7. Lerner, Josh & Merges, Robert P, 1998. "The Control of Technology Alliances: An Empirical Analysis of the Biotechnology Industry," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 46(2), pages 125-56, June.
  8. Adegbesan, Tunji & Higgins, Matthew J., 2007. "Intra-alliance performance, control rights, and today's split of tomorrow's value," IESE Research Papers, IESE Business School D/667, IESE Business School.
  9. Davidson, W H & McFetridge, Donald G, 1984. "International Technology Transactions and the Theory of the Firm," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 32(3), pages 253-64, March.
  10. Ciccotello, Conrad S. & Hornyak, Martin J., 2000. "Cooperation via contract: An analysis of research and development agreements," Journal of Corporate Finance, Elsevier, Elsevier, vol. 6(1), pages 1-24, March.
  11. Oxley, Joanne E, 1997. "Appropriability Hazards and Governance in Strategic Alliances: A Transaction Cost Approach," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 13(2), pages 387-409, October.
  12. Higgins, Matthew J. & Rodriguez, Daniel, 2006. "The outsourcing of R&D through acquisitions in the pharmaceutical industry," Journal of Financial Economics, Elsevier, Elsevier, vol. 80(2), pages 351-383, May.
  13. Stuart, Graham & Higgins, Matthew, 2007. "The Impact of Patenting on New Product Introductions in the Pharmaceutical Industry," MPRA Paper 4574, University Library of Munich, Germany.
  14. Marie Thursby & Richard Jensen, 2001. "Proofs and Prototypes for Sale: The Licensing of University Inventions," American Economic Review, American Economic Association, American Economic Association, vol. 91(1), pages 240-259, March.
  15. Aghion, Philippe & Tirole, Jean, 1994. "On the Management of Innovation," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 36, Institut d'Économie Industrielle (IDEI), Toulouse.
  16. B. Douglas Bernheim & Michael D. Whinston, 1997. "Incomplete Contracts and Strategic Ambiguity," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1787, Harvard - Institute of Economic Research.
  17. Edward E. Leamer, 1982. "Let's Take the Con Out of Econometrics," UCLA Economics Working Papers, UCLA Department of Economics 239, UCLA Department of Economics.
  18. Higgins, Matthew J., 2007. "The allocation of control rights in pharmaceutical alliances," Journal of Corporate Finance, Elsevier, Elsevier, vol. 13(1), pages 58-75, March.
  19. Pisano, Gary P, 1989. "Using Equity Participation to Support Exchange: Evidence from the Biotechnology Industry," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 5(1), pages 109-26, Spring.
  20. Jér�me Barthélemy & Bertrand V. Quélin, 2006. "Complexity of Outsourcing Contracts and "Ex Post" Transaction Costs: An Empirical Investigation," Journal of Management Studies, Wiley Blackwell, Wiley Blackwell, vol. 43(8), pages 1775-1797, December.
  21. Leamer, Edward E, 1985. "Sensitivity Analyses Would Help," American Economic Review, American Economic Association, American Economic Association, vol. 75(3), pages 308-13, June.
  22. David T. Robinson & Toby E. Stuart, 2007. "Financial Contracting in Biotech Strategic Alliances," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 50, pages 559-596.
  23. Su, Han Chan & Kensinger, John W. & Keown, Arthur J. & Martin, John D., 1997. "Do strategic alliances create value?," Journal of Financial Economics, Elsevier, Elsevier, vol. 46(2), pages 199-221, November.
  24. Joskow, Paul L, 1987. "Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets," American Economic Review, American Economic Association, American Economic Association, vol. 77(1), pages 168-85, March.
  25. Lerner, Josh & Shane, Hilary & Tsai, Alexander, 2003. "Do equity financing cycles matter? evidence from biotechnology alliances," Journal of Financial Economics, Elsevier, Elsevier, vol. 67(3), pages 411-446, March.
  26. Joskow, Paul L, 1988. "Asset Specificity and the Structure of Vertical Relationships: Empirical Evidence," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 4(1), pages 95-117, Spring.
  27. Klein, Benjamin, 1980. "Transaction Cost Determinants of "Unfair" Contractual Arrangements," American Economic Review, American Economic Association, American Economic Association, vol. 70(2), pages 356-62, May.
  28. Aghion, Philippe & Tirole, Jean, 1994. "The Management of Innovation," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(4), pages 1185-1209, November.
  29. Aghion, Philippe & Bolton, Patrick, 1992. "An Incomplete Contracts Approach to Financial Contracting," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 59(3), pages 473-94, July.
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 in new window

Cited by:
  1. Dhikra Chebbi Nekhili, 2009. "Gouvernance contractuelle et cognitive des alliances internationales en R&D," Working Papers CREGO, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations 1090505, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:4979. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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