Online Program
Session Type: Paper Session
Program Session: 1306 | Submission: 20450 | Sponsor(s): (STR)
Scheduled: Monday, Aug 12 2019 1:15PM - 2:45PM at Boston Park Plaza in Stuart
 
Joint Ventures
Joint Ventures
Research

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Chair: Sarah Maria Bruhs, Freie U. Berlin
Cooperative Strategy Track
STR: Joint Steering Committees and R&D Performance of Strategic Alliances (WITHDRAWN)
Author: Marvin Hanisch, U. of Passau
Author: Bastian Rake, Maynooth U.
Author: Fabrice Lumineau, Purdue U.
The governance of R&D alliances is a key challenge for managers across industries. Despite the expansive literature on alliance governance, we still do not have a clear understanding of the influence of governance design choices on innovation performance. In this paper, we build on the literature on hybrid administrative structures to suggest that joint steering committees increase the probability of innovation progress and reduce the time needed for that progress by improving coordination and control in R&D alliances. In addition, we draw upon the threat-rigidity theory to argue that the threat of competition from rivals leads to rigidity in joint steering committees, which reduces their adaptability and responsiveness to changes and thus their positive effect on innovation performance. We test and find support for our hypotheses using a novel and unique dataset from the bio-pharmaceutical industry, combining detailed information on 572 R&D alliances with data on the corresponding clinical trials. Our study contributes to alliance and innovation research by linking administrative structures in alliances to innovation performance and by introducing the theory of threat-rigidity to alliance research.
Paper is No Longer Available Online: Please contact the author(s).
STR: Whoa, Partner! Veto Rights in Joint Ventures
Author: Jeffrey J. Reuer, U. of Colorado, Boulder
Author: Elko Klijn, Old Dominion U.
While joint ventures lack the well-developed administrative controls associated with hierarchies, parent firms might still seek to devise ways to address unexpected contingencies, stave off conflicts, and reduce the need for intervention by third parties. Previous studies have often explicitly or implicitly treated the administrative controls utilized by joint ventures in a uniform manner, yet we suggest there is interesting and important heterogeneity in the ex post governance mechanisms parent firms put to use. More specifically, we focus on the joint venture board and introduce the veto rights provided to directors as an important means of pushing out the adaptation limits of joint ventures. We argue that usage of these rights can reduce conflicts by requiring partners’ to accommodate each other’s interests and promote continuity in the face of well-known exchange hazards. The empirical evidence is in accord with the core proposition that these rights can help parent firms address adaptation concerns and can make a joint venture viable as a governance structure. In particular, we document that firms provide more extensive decision ratification rights to directors when partnering with rivals, engaging in complex collaborations, and making relationship-specific investments.
Paper is No Longer Available Online: Please contact the author(s).
STR: Joint Venture or Minority Alliance? A Policy Capturing Study on Different Equity Governance Modes
Author: Johann Fritz Voigtsberger, Free U. Berlin
Author: Sarah Maria Bruhs, Freie U. Berlin
Author: Thomas Mellewigt, Freie U. Berlin
Author: Ann-Kathrin Herfeld, WU Vienna
In this paper we investigate the determinants of choosing minority alliances over joint ventures, suggesting that – while both are forms of equity alliances – they offer different governance advantages for firms and should thus be distinguished. Whereas prior research has focused on joint ventures as ideal types of equity alliances, scholars have largely overlooked the role of minority alliances as an alternative mode of equity-based governance. In a first step, we develop a framework to differentiate joint ventures from minority alliances. This allows us to disentangle each alliance forms’ specific abilities to provide effective safeguarding, coordination and flexibility—more comprehensively than prior research has done. In a second step, we develop hypotheses regarding the conditions under which minority alliances may be favored over joint ventures, offering a clear extension to the existing literature. Finally, we use a policy capturing approach to investigate manager’s choice of minority alliances versus joint ventures in a quasi- experimental setting. Our results show that managers can significantly distinguish between both equity-based forms under a broad alliance scope and high levels of asset specificity, but do not differentiate between minority alliances and joint ventures when a R&D component exits in the collaboration or when technological uncertainty is high.
Paper is No Longer Available Online: Please contact the author(s).
STR: Share Misallocation and Termination of Equity Joint Ventures
Author: Liang Wang, Nottingham U. Business School China
Equity joint ventures (EJVs) have been known for its high probability of unexpected termination. In this paper, we explore how share distribution between partners affects the odds an EJV terminates. We develop the concept of share misallocation, which captures the degree the actual share distribution in an EJV deviates from the optimal. The optimal share distribution in an EJV is the percentage combination that allows profit sharing from the join venture to fully nullify the errors partners commit in pricing each other's asset contributions. We propose that share misallocation increases the likelihood of termination. Results from survival analysis largely support the proposed effect of share misallocation.
Paper is No Longer Available Online: Please contact the author(s).
  
KEY TO SYMBOLS Teaching-oriented Teaching-oriented   Practice-oriented Practice-oriented   International-oriented International-oriented   Theme-oriented Theme-oriented   Research-oriented Research-oriented   Teaching-oriented Diversity-oriented
Selected as a Best Paper Selected as a Best Paper