IDEAS home Printed from https://ideas.repec.org/a/bla/jomstd/v47y2010i6p995-1019.html
   My bibliography  Save this article

Partner Selection Decisions in Interfirm Collaborations: The Paradox of Relational Embeddedness

Author

Listed:
  • Miguel Meuleman
  • Andy Lockett
  • Sophie Manigart
  • Mike Wright

Abstract

By combining insights from relational network theory and agency theory we identify the boundary conditions to the embeddedness approach to partner selection decisions in interfirm collaborations. Employing a longitudinal dataset comprising the investment syndicates for the population of UK management buyouts between 1993 and 2003, we find that relational embeddedness is less important for selecting partners when agency risks are low, allowing firms to expand their networks. Furthermore, reputational capital may act as a partial substitute for relational embeddedness, again permitting firms to expand their networks. Our findings enhance understanding of the boundary conditions associated with the relational network approach to partner selections and network behaviour.

Suggested Citation

  • Miguel Meuleman & Andy Lockett & Sophie Manigart & Mike Wright, 2010. "Partner Selection Decisions in Interfirm Collaborations: The Paradox of Relational Embeddedness," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 995-1019, September.
  • Handle: RePEc:bla:jomstd:v:47:y:2010:i:6:p:995-1019
    DOI: 10.1111/j.1467-6486.2009.00897.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-6486.2009.00897.x
    Download Restriction: no

    File URL: https://libkey.io/10.1111/j.1467-6486.2009.00897.x?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
    ---><---

    References listed on IDEAS

    as
    1. Bruce Kogut, 1988. "Joint ventures: Theoretical and empirical perspectives," Strategic Management Journal, Wiley Blackwell, vol. 9(4), pages 319-332, July.
    2. Yael V. Hochberg & Alexander Ljungqvist & Yang Lu, 2007. "Whom You Know Matters: Venture Capital Networks and Investment Performance," Journal of Finance, American Finance Association, vol. 62(1), pages 251-301, February.
    3. Black, Bernard S. & Gilson, Ronald J., 1998. "Venture capital and the structure of capital markets: banks versus stock markets," Journal of Financial Economics, Elsevier, vol. 47(3), pages 243-277, March.
    4. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    5. Chang, Sea Jin, 2004. "Venture capital financing, strategic alliances, and the initial public offerings of Internet startups," Journal of Business Venturing, Elsevier, vol. 19(5), pages 721-741, September.
    6. Lockett, Andy & Wright, Mike, 2001. "The syndication of venture capital investments," Omega, Elsevier, vol. 29(5), pages 375-390, October.
    7. Tereza Tykvová, 2007. "Who chooses whom? Syndication, skills and reputation," Review of Financial Economics, John Wiley & Sons, vol. 16(1), pages 5-28.
    8. Wim Vanhaverbeke & Victor Gilsing & Bonnie Beerkens & Geert Duysters, 2009. "The Role of Alliance Network Redundancy in the Creation of Core and Non‐core Technologies," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 215-244, March.
    9. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-817, August.
    10. Admati, Anat R & Pfleiderer, Paul, 1994. "Robust Financial Contracting and the Role of Venture Capitalists," Journal of Finance, American Finance Association, vol. 49(2), pages 371-402, June.
    11. Richard B. Carter & Frederick H. Dark & Ajai K. Singh, 1998. "Underwriter Reputation, Initial Returns, and the Long-Run Performance of IPO Stocks," Journal of Finance, American Finance Association, vol. 53(1), pages 285-311, February.
    12. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    13. Gautam Ahuja, 2000. "The duality of collaboration: inducements and opportunities in the formation of interfirm linkages," Strategic Management Journal, Wiley Blackwell, vol. 21(3), pages 317-343, March.
    14. Dirk De Clercq & Dimo Dimov, 2008. "Internal Knowledge Development and External Knowledge Access in Venture Capital Investment Performance," Journal of Management Studies, Wiley Blackwell, vol. 45(3), pages 585-612, May.
    15. James A. Brander & Raphael Amit & Werner Antweiler, 2002. "Venture‐Capital Syndication: Improved Venture Selection vs. The Value‐Added Hypothesis," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(3), pages 423-452, September.
    16. Bill McEvily & Vincenzo Perrone & Akbar Zaheer, 2003. "Trust as an Organizing Principle," Organization Science, INFORMS, vol. 14(1), pages 91-103, February.
    17. Gompers, Paul A, 1995. "Optimal Investment, Monitoring, and the Staging of Venture Capital," Journal of Finance, American Finance Association, vol. 50(5), pages 1461-1489, December.
    18. Bygrave, William D., 1988. "The structure of the investment networks of venture capital firms," Journal of Business Venturing, Elsevier, vol. 3(2), pages 137-157.
    19. Shanthi Gopalakrishnan & Joanne L. Scillitoe & Michael D. Santoro, 2008. "Tapping Deep Pockets: The Role of Resources and Social Capital on Financial Capital Acquisition by Biotechnology Firms in Biotech–Pharma Alliances," Journal of Management Studies, Wiley Blackwell, vol. 45(8), pages 1354-1376, December.
    20. Megginson, William L & Weiss, Kathleen A, 1991. "Venture Capitalist Certification in Initial Public Offerings," Journal of Finance, American Finance Association, vol. 46(3), pages 879-903, July.
    21. Miguel Meuleman & Mike Wright & Sophie Manigart & Andy Lockett, 2009. "Private Equity Syndication: Agency Costs, Reputation and Collaboration," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(5-6), pages 616-644.
    22. Joshua Lerner, 1994. "The Syndication of Venture Capital Investments," Financial Management, Financial Management Association, vol. 23(3), Fall.
    23. Dirk De Clercq & Harry J. Sapienza & Akbar Zaheer, 2008. "Firm and Group Influences on Venture Capital Firms’ Involvement in New Ventures," Journal of Management Studies, Wiley Blackwell, vol. 45(7), pages 1169-1194, November.
    24. Steven N. Kaplan & Jeremy C. Stein, 1993. "The Evolution of Buyout Pricing and Financial Structure in the 1980s," The Quarterly Journal of Economics, Oxford University Press, vol. 108(2), pages 313-357.
    25. Nitin Nohria & Carlos Garcia‐Pont, 1991. "Global strategic linkages and industry structure," Strategic Management Journal, Wiley Blackwell, vol. 12(S1), pages 105-124, June.
    26. Mike Wright & Andy Lockett, 2003. "The Structure and Management of Alliances: Syndication in the Venture Capital Industry," Journal of Management Studies, Wiley Blackwell, vol. 40(8), pages 2073-2102, December.
    27. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    28. Douglas J. Cumming, 2006. "The Determinants of Venture Capital Portfolio Size: Empirical Evidence," The Journal of Business, University of Chicago Press, vol. 79(3), pages 1083-1126, May.
    29. Steve Maguire & Nelson Phillips, 2008. "‘Citibankers’ at Citigroup: A Study of the Loss of Institutional Trust after a Merger," Journal of Management Studies, Wiley Blackwell, vol. 45(2), pages 372-401, March.
    30. Steven N. Kaplan & Jeremy C. Stein, 1993. "THE EVOLUTION OF BUYOUT PRICING AND FINANCIAL STRUCTURE (OR, WHAT WENT WRONG) IN THE 1980s," Journal of Applied Corporate Finance, Morgan Stanley, vol. 6(1), pages 72-88, March.
    31. David T. Robinson & Toby E. Stuart, 2007. "Network Effects in the Governance of Strategic Alliances," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 23(1), pages 242-273, April.
    32. Scott Shane & Daniel Cable, 2002. "Network Ties, Reputation, and the Financing of New Ventures," Management Science, INFORMS, vol. 48(3), pages 364-381, March.
    33. Martin Gargiulo & Mario Benassi, 2000. "Trapped in Your Own Net? Network Cohesion, Structural Holes, and the Adaptation of Social Capital," Organization Science, INFORMS, vol. 11(2), pages 183-196, April.
    34. Steven N. Kaplan & Per Strömberg, 2004. "Characteristics, Contracts, and Actions: Evidence from Venture Capitalist Analyses," Journal of Finance, American Finance Association, vol. 59(5), pages 2177-2210, October.
    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. Meuleman, Miguel & Jääskeläinen, Mikko & Maula, Markku V.J. & Wright, Mike, 2017. "Venturing into the unknown with strangers: Substitutes of relational embeddedness in cross-border partner selection in venture capital syndicates," Journal of Business Venturing, Elsevier, vol. 32(2), pages 131-144.
    2. Chomsorn Tangdenchai & Asda Chintakananda & George O. White, 2023. "Active and passive bribery’s impact on firm relational embeddedness: evidence from Thailand," Asian Business & Management, Palgrave Macmillan, vol. 22(4), pages 1773-1799, September.
    3. Stevens, Charles E. & Makarius, Erin E. & Mukherjee, Debmalya, 2015. "It Takes Two to Tango: Signaling Behavioral Intent in Service Multinationals' Foreign Entry Strategies," Journal of International Management, Elsevier, vol. 21(3), pages 235-248.
    4. Golonka, Monika, 2015. "Proactive cooperation with strangers: Enhancing complexity of the ICT firms' alliance portfolio and their innovativeness," European Management Journal, Elsevier, vol. 33(3), pages 168-178.
    5. J. Nils Foege & Erk P. Piening & Torsten-Oliver Salge, 2017. "Don’T Get Caught On The Wrong Foot: A Resource-Based Perspective On Imitation Threats In Innovation Partnerships," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(03), pages 1-42, April.
    6. Jie Liang & Peng Shao, 2019. "Sequential Alliance Portfolios, Partner Reconfiguration and Firm Performance," Sustainability, MDPI, vol. 11(21), pages 1-20, October.
    7. Wang, Pengfei, 2020. "Broadening versus reinforcing investor portfolios: Social structure and the search for venture capital investors," Journal of Business Venturing, Elsevier, vol. 35(1).
    8. Francois Collet & Déborah Philippe, 2014. "From Hot Cakes to Cold Feet: A Contingent Perspective on the Relationship between Market Uncertainty and Status Homophily in the Formation of Alliances," Journal of Management Studies, Wiley Blackwell, vol. 51(3), pages 406-432, May.
    9. Chen Liu & Lynnette Purda & Hui Zhu, 2021. "Institutional influence on syndicate structure and cross‐border leveraged buyouts," Financial Management, Financial Management Association International, vol. 50(1), pages 169-202, March.
    10. Eric Nasica & Dominique Torre & Dominique Dufour, 2011. "Syndication in private equity industry: comparing the strategies of independent and captive venture capitalists," Post-Print halshs-00720785, HAL.
    11. Lô, Amadou & Geiger, Martha, 2022. "Managing internal embeddedness in multinational corporations’ R&D subsidiaries: An evolutionary perspective on the automotive industry in Silicon Valley," Technovation, Elsevier, vol. 113(C).
    12. En Xie & Mike Peng & Wenhong Zhao, 2013. "Uncertainties, resources, and supplier selection in an emerging economy," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 1219-1242, December.
    13. Lee, Cheng-Yu & Wang, Ming-Chao & Huang, Yen-Chih, 2015. "The double-edged sword of technological diversity in R&D alliances: Network position and learning speed as moderators," European Management Journal, Elsevier, vol. 33(6), pages 450-461.
    14. Hana Milanov & Dean A. Shepherd, 2013. "The importance of the first relationship: The ongoing influence of initial network on future status," Strategic Management Journal, Wiley Blackwell, vol. 34(6), pages 727-750, June.
    15. Bai, Xuan & Wang, Qingtao & Sheng, Shibin & Li, Julie Juan, 2021. "Cross-level interpersonal ties and IJV innovation: Evidence from China," Journal of Business Research, Elsevier, vol. 134(C), pages 618-630.
    16. Cheng, Chun-Yun & Tang, Ming-Je, 2019. "Partner-selection effects on venture capital investment performance with uncertainties," Journal of Business Research, Elsevier, vol. 95(C), pages 242-252.
    17. S. Hossein Jalali, 2017. "Partner Capabilities and Alliance Time Frame: An Analysis of International Strategic Alliances from the CEE," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 13(2), pages 59-75.
    18. Hu, Xiao & Wang, Jiayi & Wu, Banggang, 2022. "Venture capital firms’ lead orientation, network position, and selection of familiar syndicate partners," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    19. Katarzyna Sienkiewicz-Małyjurek, 2022. "Interpretive structural modelling of inter-agency collaboration risk in public safety networks," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(3), pages 1193-1221, June.
    20. Sunny Hahn & Jina Kang, 2017. "Complementary or conflictory?: the effects of the composition of the syndicate on venture capital-backed IPOs in the US stock market," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 44(1), pages 77-102, March.
    21. Lei Zhang, 2019. "Founders Matter! Serial Entrepreneurs and Venture Capital Syndicate Formation," Entrepreneurship Theory and Practice, , vol. 43(5), pages 974-998, September.
    22. Sanjith Gopalakrishnan & Moksh Matta & Hasan Cavusoglu, 2022. "The Dark Side of Technological Modularity: Opportunistic Information Hiding During Interorganizational System Adoption," Information Systems Research, INFORMS, vol. 33(3), pages 1072-1092, September.
    23. De Clercq, Dirk & Meuleman, Miguel & Wright, Mike, 2012. "A cross-country investigation of micro-angel investment activity: The roles of new business opportunities and institutions," International Business Review, Elsevier, vol. 21(2), pages 117-129.
    24. Tom Vanacker & Sophie Manigart & Miguel Meuleman, 2014. "Path–Dependent Evolution versus Intentional Management of Investment Ties in Science–Based Entrepreneurial Firms," Entrepreneurship Theory and Practice, , vol. 38(3), pages 671-690, May.
    25. Wright, Mike & Kellermanns, Franz W., 2011. "Family firms: A research agenda and publication guide," Journal of Family Business Strategy, Elsevier, vol. 2(4), pages 187-198.

    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. Miguel Meuleman & Mike Wright & Sophie Manigart & Andy Lockett, 2009. "Private Equity Syndication: Agency Costs, Reputation and Collaboration," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(5-6), pages 616-644.
    2. Miguel Meuleman & Mike Wright & Sophie Manigart & Andy Lockett, 2009. "Private Equity Syndication: Agency Costs, Reputation and Collaboration," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(5‐6), pages 616-644, June.
    3. Mikko Jääskeläinen & Markku Maula & Tuukka Seppä, 2006. "Allocation of Attention to Portfolio Companies and the Performance of Venture Capital Firms," Entrepreneurship Theory and Practice, , vol. 30(2), pages 185-206, March.
    4. Andrew Metrick & Ayako Yasuda, 2011. "Venture Capital and Other Private Equity: a Survey," European Financial Management, European Financial Management Association, vol. 17(4), pages 619-654, September.
    5. Hu, Xiao & Wang, Jiayi & Wu, Banggang, 2022. "Venture capital firms’ lead orientation, network position, and selection of familiar syndicate partners," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    6. Haizhi Wang & Robert Wuebker & Shu Han & Michael Ensley, 2012. "Strategic alliances by venture capital backed firms: an empirical examination," Small Business Economics, Springer, vol. 38(2), pages 179-196, February.
    7. Dimov, Dimo & Milanov, Hana, 2010. "The interplay of need and opportunity in venture capital investment syndication," Journal of Business Venturing, Elsevier, vol. 25(4), pages 331-348, July.
    8. 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.
    9. Johannes Wallmeroth & Peter Wirtz & Alexander Peter Groh, 2017. "Institutional Seed Financing, Angel Financing, and Crowdfunding of Entrepreneurial Ventures: A Literature Review," Working Papers hal-01527999, HAL.
    10. Douglas Cumming & Sofia Johan, 2006. "Provincial preferences in private equity," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 20(4), pages 369-398, December.
    11. Schilder, Dirk, 2007. "Venture capital syndicate networks: the determinants of interconnectedness," Freiberg Working Papers 2007/03, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
    12. Rin, Marco Da & Hellmann, Thomas & Puri, Manju, 2013. "A Survey of Venture Capital Research," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, volume 2, chapter 0, pages 573-648, Elsevier.
    13. Sophie Manigart & Andy Lockett & Miguel Meuleman & Mike Wright & Hans Landström & Hans Bruining & Philippe Desbrières & Ulrich Hommel, 2006. "Venture Capitalists’ Decision to Syndicate," Entrepreneurship Theory and Practice, , vol. 30(2), pages 131-153, March.
    14. Casamatta, Catherine & Haritchabalet, Carole, 2007. "Experience, screening and syndication in venture capital investments," Journal of Financial Intermediation, Elsevier, vol. 16(3), pages 368-398, July.
    15. Grilli, Luca & Murtinu, Samuele, 2014. "Government, venture capital and the growth of European high-tech entrepreneurial firms," Research Policy, Elsevier, vol. 43(9), pages 1523-1543.
    16. Lohwasser, Todor S., 2020. "Meta-analyzing the relative performance of venture capital-backed firms," Discussion Papers of the Institute for Organisational Economics 4/2020, University of Münster, Institute for Organisational Economics.
    17. Espenlaub, Susanne & Khurshed, Arif & Mohamed, Abdulkadir, 2014. "Does cross-border syndication affect venture capital risk and return?," International Review of Financial Analysis, Elsevier, vol. 31(C), pages 13-24.
    18. Douglas Cumming & Sofia Johan, 2007. "Advice and monitoring in venture finance," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 21(1), pages 3-43, March.
    19. Zhiyang Liu & Zhiqi Chen, 2014. "Venture Capital Networks and Investment Performance in China," Australian Economic Papers, Wiley Blackwell, vol. 53(1-2), pages 97-111, June.
    20. Baker, Malcolm & Gompers, Paul A, 2003. "The Determinants of Board Structure at the Initial Public Offering," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 569-598, October.

    More about this item

    Statistics

    Access and download statistics

    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:bla:jomstd:v:47:y:2010:i:6:p:995-1019. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2380 .

    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.