Pro- Versus Anti-Competitive Alliances

37 Pages Posted: 18 Nov 2002

See all articles by Stefan Arping

Stefan Arping

University of Amsterdam Business School; Tinbergen Institute

Michael Troege

ESCP-Europe

Date Written: September 10, 2002

Abstract

This paper considers the competitive effects of funding and collaboration alliances between established corporations and entrepreneurial potential rivals. We develop a formal setting to explore how in the presence of mutual agency conflicts, (i) cost efficiencies from resource sharing, (ii) the strength of strategic substitutabilities/replacement effects, and (iii) alliance design (arm's length vs tight relationships, financial security design) give rise to anti- or pro-competitive effects. The analysis provides novel insights into the competitive effects of alliances between rivals, the optimal design of alliances, and the differenent roles of equity participations.

Keywords: Strategic Alliances, Collaborations Among Competitors, Financial Contracting and Product Market Competition, Entrepreneurship, Antitrust

JEL Classification: G3, L1, L2, L4, M1

Suggested Citation

Arping, Stefan and Troege, Michael, Pro- Versus Anti-Competitive Alliances (September 10, 2002). Available at SSRN: https://ssrn.com/abstract=321661 or http://dx.doi.org/10.2139/ssrn.321661

Stefan Arping (Contact Author)

University of Amsterdam Business School ( email )

Roetersstraat 18
Amsterdam, 1018WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Michael Troege

ESCP-Europe ( email )

79, Avenue de Republique
75543 Paris, Cedex 11, 75011
France
33/149232601 (Phone)

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