Strategic alliances and the boundaries of the firm

Journal Article (Journal Article)

Strategic alliances are long-term contracts between legally distinct organizations that provide for sharing the costs and benefits of a mutually beneficial activity. In this paper, I develop and test a model that helps explain why firms sometimes prefer alliances over internally organized projects. I introduce managerial effort into a model of internal capital markets and show how strategic alliances help overcome incentive problems that arise when headquarters cannot pre-commit to particular capital allocations. The model generates a number of implications, which I test using a large sample of alliance transactions in conjunction with Compustat data.

Full Text

Duke Authors

Cited Authors

  • Robinson, DT

Published Date

  • April 1, 2008

Published In

Volume / Issue

  • 21 / 2

Start / End Page

  • 649 - 681

Electronic International Standard Serial Number (EISSN)

  • 1465-7368

International Standard Serial Number (ISSN)

  • 0893-9454

Digital Object Identifier (DOI)

  • 10.1093/rfs/hhm084

Citation Source

  • Scopus