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Strategic Alliances between Foreign-Owned Firms and Local Firms: The Role of Partner and Industry Types

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  • Yunok Cho
  • Jungho Kim

Abstract

This article investigates how a firm’s foreign equity share affects its likelihood of strategic alliances with local firms, discussing the benefits and costs of such strategic alliances. Analysing a panel dataset of Korean firms, we find the inverted U-shaped relationship between foreign equity share and the likelihood of alliance involvement. We also find that the relationship depends on the types of alliance partner and industry. This relationship is relatively steeper when the foreign-owned firm collaborates with a local firm in a different industry. The negative effect of foreign equity share on the likelihood of strategic alliances dominates in high-technology industries.

Suggested Citation

  • Yunok Cho & Jungho Kim, 2022. "Strategic Alliances between Foreign-Owned Firms and Local Firms: The Role of Partner and Industry Types," Global Economic Review, Taylor & Francis Journals, vol. 51(4), pages 355-376, October.
    • Handle: RePEc:taf:glecrv:v:51:y:2022:i:4:p:355-376
    DOI: 10.1080/1226508X.2022.2151029
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