Internal and external resource endowments in alliances : the impact on knowledge flows and competitive actions

Abstract

Firms extend access to resources by partnering with other firms. Thus, in the second essay, we study how firms leverage their partners' resources in order to compete. We examine the impact of firm's partners' knowledge portfolio - stock and diversity - on volume, complexity and heterogeneity of actions. Further we argue that firms can leverage their partners' resources in different ways depending on their network position. We find that partners' knowledge has a positive effect on competitive action volume and complexity. We do not find partners' knowledge to impact heterogeneity of actions. Further, we find that central firms due to experience at managing ties are better able to use their partners' resources and thus have more opportunities that turn into a higher volume of complex and heterogeneous actions. Lastly, we have found that the potential of exposure to high and diverse stocks of knowledge is not realized if the firm's partners are highly unconnected (access to structural holes) due to reduced trust among the partners and thus less information and knowledge flows though the ego network.

This dissertation consists of two distinct but related essays on resource endowments, both internal and external (accessible through alliances) and their impact on knowledge flows and competitive actions. Collaborating in strategic alliances gives the focal firm the potential to learn new and unique knowledge, expanding its resources and information access needed to compete in today's competitive environment. Firms learn and act differently depending not only on the internal and external resources they have access to but also on their ability to leverage these resources.

In the first essay, using patent data, we study how symmetric resource endowments of alliance partners impact knowledge flows between them. In particular, we study whether knowledge stock symmetry and IT investments symmetry in alliance partners result in enhanced knowledge inflows and knowledge outflows. We find that knowledge stock symmetry enhances both knowledge inflows and knowledge outflows only when the partners are both equipped with high knowledge stocks. We do not find this to be the case when partners have both low knowledge stocks. Further, we find that the higher the symmetry in IT investments of the partners, the greater the knowledge flows for both partners as a result of the alliance. Lastly, we find that alliances in which the partners are both equipped with high knowledge stocks and have symmetry in IT investment intensity result in enhanced knowledge inflows and outflows as compared to firms that do not exhibit these characteristics.