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The Detail of Drugs: Horizontal Distribution Alliances in the International Pharmaceutical Industry

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  • Sullivan, Ursula Y.

    (U of Illinois at Urbana-Champaign)

  • Coughlan, Anne T.

    (Northwestern U)

Abstract

The primary contribution from this research lies in the uncovering of the factors that predict the formation of horizontal distribution alliances (HDAs) as well as their success. HDAs are characterized by the joining of two firms??from the same industry??to distribute a product owned by one of the firms into a new market. Resource Dependence and Transaction Cost Analysis are the two organization theories integrated with firm?specific strategic concerns to formulate predictions on how these alliances are formed and structured to achieve success. Empirical, dyadic research is conducted in the global pharmaceutical industry. Findings suggest that certain environmental constraints as well as strategic motivations will affect the entrant firm's choice to form an alliance. Results also indicate that a certain level of dependence is required to achieve a successful alliance for both partners; however, too much dependence can negatively affect alliance satisfaction.

Suggested Citation

  • Sullivan, Ursula Y. & Coughlan, Anne T., 2004. "The Detail of Drugs: Horizontal Distribution Alliances in the International Pharmaceutical Industry," Working Papers 04-0114, University of Illinois at Urbana-Champaign, College of Business.
  • Handle: RePEc:ecl:illbus:04-0114
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    File URL: http://www.business.illinois.edu/Working_Papers/papers/04-0114.pdf
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    4. Farok J Contractor & Sumit K Kundu, 1998. "Modal Choice in a World of Alliances: Analyzing Organizational Forms in the International Hotel Sector," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(2), pages 325-356, June.
    5. Gatignon, Hubert & Anderson, Erin, 1988. "The Multinational Corporation's Degree of Control over Foreign Subsidiaries: An Empirical Test of a Transaction Cost Explanation," Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(2), pages 305-336, Fall.
    6. Preet S Aulakh & Masaaki Kotabe, 1997. "Antecedents and Performance Implications of Channel Integration in Foreign Markets," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(1), pages 145-175, March.
    7. John, George & Weitz, Barton A, 1988. "Forward Integration into Distribution: An Empirical Test of Transaction Cost Analysis," Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(2), pages 337-355, Fall.
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