Network resource stocks and flows: how do alliance portfolios affect the value of new alliance formations?

• Date: 01 July 2012
• Published date: 01 July 2012
• Author: Ulrich Wassmer,Pierre Dussauge
• DOI: http://doi.org/10.1002/smj.973

Strategic Management Journal

Strat. Mgmt. J.,32: 871– 883 (2011)

Published online EarlyView in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/smj.973

Received 11 September 2009;Final revision received 3 October 2011

RESEARCH NOTES AND COMMENTARIES

NETWORK RESOURCE STOCKS AND FLOWS: HOW

DO ALLIANCE PORTFOLIOS AFFECT THE VALUE

OF NEW ALLIANCE FORMATIONS?

ULRICH WASSMER1* and PIERRE DUSSAUGE2

1

John Molson School of Business, Concordia University, Montr ´

eal, Qu ´

ebec, Canada

2

HEC-Paris, France

We examine how new network resources accessed through alliance formations interact with

network resources presentin a firm’s alliance portfolio. We test our theoretical model using event

study methodology and data from the global air transportation industry. We find that the market

rewards firms forming alliances that contribute resources that can be synergistically combined

with firms’ own resources as well as with network resources accessed through their alliance

portfolios. Our results also indicate that the market penalizes firms entering into alliances that

create resource combinations that are substitutes to resource combinations deployed by existing

alliance partners. Copyright 2011 John Wiley & Sons, Ltd.

INTRODUCTION

How do new alliance formations interact with

a firm’s portfolio of existing alliances to create

or destroy value? Building on the resource-based

view (RBV) of the firm, which conceptualizes

alliances as access mechanisms to partner-owned

resources, we examine the synergies as well as the

conflicts that may exist between a new alliance

and a firm’s already existing alliances. In doing

so, we investigate how new network resources

Keywords: resource-based view of the firm; network

resources; strategic alliances; alliance portfolios; value

creation

∗Correspondence to: Ulrich Wassmer, John Molson School of

Business, Concordia University, 1450 Guy Street, MB 13.355,

Montr´

eal, Qu´

ebec H1H 1L8, Canada.

E-mail: uwassmer@jmsb.concordia.ca

(Gulati, 2007; Lavie, 2008), that is, resources

a focal firm accesses through new alliance for-

mations (Ahuja, 2000; Gulati, 1999; Oum et al.,

2004) interact with the firm’s existing stock of

network resources accessed through its current

alliance portfolio (Hoffmann, 2007; Lavie, 2007;

Wassmer, 2010) in ways that affect firm value. In

other words, we examine how network resource

stocks and flows impact firm value.

In this research, it is our goal to make three

main contributions to the alliance and network

resource literatures. First, we extend the RBV-

based literature that takes a single alliance per-

spective (Chung, Singh, and Lee, 2000; Das and

Teng 2000; Dyer and Singh, 1998) and, thus,

conceptually captures only a fraction of a net-

work resource’s value creating capacity. By tak-

ing an alliance portfolio perspective, we analyze

Copyright 2011 John Wiley & Sons, Ltd.