Partner Type Diversity in Alliance Portfolios: Multiple Dimensions, Boundary Conditions and Firm Innovation Performance

• Author: Ann‐Kristin Zobel,Boris Lokshin,John Hagedoorn
• Published date: 01 July 2018
• Date: 01 July 2018
• DOI: http://doi.org/10.1111/joms.12326

Partner Type Diversity in Alliance Portfolios: Multiple

Dimensions, Boundary Conditions and Firm

Innovation Performance

John Hagedoorn, Boris Lokshin and Ann-Kristin Zobel

Royal Holloway University of London and UNU-MERIT, Maastricht University; Maastricht Univer-

sity; ETH Z€urich

ABSTRACT Our research extends the current knowledge based view on the configuration of

alliance portfolios and their deployment in different external knowledge environments. We

study these alliance portfolios in a longitudinal sample (1996–2010) for over three thousand

firms that operate in a large number of industries in the Netherlands. Our findings indicate

that partner type variety and partner type relevance, as different dimensions of partner

diversity in alliance portfolios, both have an inverted U-shaped association with firm

innovation performance. However, alliance portfolios characterized by both high partner type

variety and high relevance cause inferior innovation performance. Different external

knowledge environments, characterized by different levels of industry modularity and scope of

knowledge distribution, moderate the inverted U-shaped associations of partner type variety

and relevance in alliance portfolios with firm innovation performance in opposing directions.

While for partner type variety, a high level is found to be optimal in environments with

greater modularity or broader scope of knowledge distribution, for partner type relevance it

turns out that a low level is optimal under more modular industry conditions.

Keywords: alliance portfolios, industry contingencies, innovation performance, knowledge-

based view, portfolio diversity

INTRODUCTION

Scholars studying firm alliances increasingly argue that corporate objectives such as the

spurring of innovation are not achieved through the success of one particular alliance

but through the joint effect of the overall portfolio of collaborations (e.g., Lavie, 2007;

Address for reprints: John Hagedoorn, School of Management, Royal Holloway University of London,

Egham (Surrey), TW20 0EX United Kingdom (John.Hagedoorn@rhul.ac.uk).

This is an open access article under the terms of the Creative Commons Attribution License, which

permits use, distribution and reproduction in any medium, provided the original work is properly cited.

V

C2017 The Authors

Journal of Management Studies published by John Wiley & Sons Ltd and

Society for the Advancement of Management Studies

Journal of Management Studies 55:5 July 2018

doi: 10.1111/joms.12326

Wassmer, 2010). Alliance portfolios enable the development of new capabilities and

new products through various knowledge inputs (Rothaermel and Alexandre, 2009) and

thereby, have a potential influence on firm innovation performance. Accordingly, recent

research suggests that the configuration of an alliance portfolio, in particular with

respect to its diversity, is a critical strategic issue (Faems et al., 2005; Hoffmann, 2007;

Jiang et al., 2010; Lee et al., 2017).

Previous studies have explored various types of alliance portfolio diversity, such as

technological, governance, national, or partner type diversity (see Lee et al., 2017, for an

overview). Empirical work reveals mixed findings regarding the implication of these types

of diversity for firm innovation performance, ranging from positive (e.g., Nieto and San-

tamaria, 2007; Srivastava and Gnyawali, 2011), to negative associations (Cui and

O’Connor, 2012), as well as inverted U-shaped (De Leeuw et al., 2014; Oerlemans et al.,

2013) or even U-shaped relationships (Wuyts and Dutta, 2014). Relying on the

knowledge-based view (KBV), we contribute to this literature by shedding light on the

intricacies of the alliance portfolio diversity – innovation performance relationship. Given

the increasing number of actors that are participating in a more distributed innovation

process (e.g. Faems et al., 2010; Laursen and Salter, 2006), we focus on partner type

diversity as an important type of alliance portfolio diversity. Our investigation of partner

type diversity addresses two important gaps in this line of research on alliance portfolios.

First, so far extant studies have investigated specific types of diversity (for instance, partner

type diversity) in terms of single dimensions or measures (Caner and Tyler, 2013; Jiang

et al., 2010; Van de Vrande, 2013). We argue that it is imperative to adopt a multi-

dimensional perspective of partner type diversity. Prior studies already indicated that diver-

sity does not only refer to the number of partner categories with which a firm forms alliances

(i.e., partner types), but also includes the extent to which resources are distributed across

these categories (see for instance Bruyaka and Durand, 2011). While previous research col-

lapses these two dimensions within one construct, we tease them apart as we understand

variety and relevance to refer to different aspects of alliance portfolio diversity. On the one

hand, we define partner type variety as the number of different partner types (i.e., custom-

ers, suppliers, competitors, universities, research institutes) with whom a focal firm collabo-

rates. On the other hand, we define partner type relevance as the importance of different

partner types as sources of knowledge used in collaborative innovation activities.

Drawing from the KBV, we theorize that partner type variety and relevance trigger

different knowledge sharing mechanisms that explain their associations with firm innova-

tion performance. Prior literature differentiates between two knowledge sharing mecha-

nisms in the context of alliances – knowledge access and knowledge integration (Grant

and Baden-Fuller, 2004; Inkpen, 1998). First, knowledge access refers to a form of knowl-

edge sharing in which each firm accesses its partner’s knowledge base in order to exploit

complementarities, but with the intention of maintaining its distinctive base of specialized

knowledge (Grant and Baden-Fuller, 2004; Lavie, 2007). Second, knowledge integration

suggests that firms use their alliances to actually absorb and internalize their partner’s

knowledge base (Grant and Baden-Fuller, 2004; Lorenzoni and Lipparini, 1999; Vasu-

deva and Anand, 2011). We follow this perspective and suggest that these two knowledge

sharing mechanisms help explain how partner type variety and relevance contribute to

firm innovation performance. We further argue that the multi-dimensional perspective of

810 J. Hagedoorn et al.

V

C2017 The Authors

Journal of Management Studies published by John Wiley & Sons Ltd and

Society for the Advancement of Management Studies