The Effect of Strategic Technology Alliances on Company Performance
Posted: 17 Nov 2009
Date Written: 1994
Abstract
Explores the effect of strategic technology partnerships on the profitability of the firms involved in such partnerships. A path model is developed that identifies the direct effects of each factor on the other factors. Five factor groups are considered: sectoral features, national circumstances, company structure, innovativeness, and external linkages. Focus is on 346 companies located in Europe, the United States, and Japan that are in the information technologies and electronics sector, the mechanical engineering field, or the process industry. Data is gathered for this analysis through a process termed "literature-based alliance counting," which involved using various newspaper and journal articles in addition to data from the Cooperative Agreements and Technology Indicators (CATI) information system. Results show that firms that are patent-intensive are extremely involved in strategic partnering. Of the three industries examined, information technology showed the greatest cooperation intensity while process industries were the lowest. U.S. firms were less likely to cooperate strategically than the European and Japanese firms considered. Firm size was shown to impact the decision to pursue strategic partnerships. The larger the firm, the more likely that firm is to associate with other firms. No support for the proposition that size affects profitability was shown. (SRD)
Keywords: Mechanical engineering, Profitability, Earnings, Joint ventures, Information & communication technologies, Firm size, Patent productivity, Electronics industry, Firm performance, Strategic alliances, Interfirm alliances
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