The Longevity of Social Asymmetric Alliances

This project is a study in research of interfirm alliances. We investigate the longevity of alliances with partners that are asymmetric in network centrality. Prior research suggests a short duration of such alliances because partners with a disparity in network resources experience power imbalance and integration difficulties. Although scholars have realized the benefits of resource complementary in maintaining long partnerships, previous literature has not sufficiently incorporated the advantages of social asymmetry in alliance longevity. We contend that because centrality-asymmetric partners are complementary in information and social status and have less interpartner competition, a moderate asymmetry that balances hazards and benefits can enhance alliance longevity. We plan to use Japanese overseas equity alliances to investigate the impact of social asymmetry on alliance longevity, holding the hypothesis that intermediate levels of centrality asymmetry between parent firms sustain longer than those with low or high asymmetry. We also predict that the effects of centrality asymmetry on alliance longevity be reduced by external competition that enhances partner cohesion, but enlarged by partners firm-specific uncertainty that increases their volatility in partnering. We are going to test our theory with data of equity alliances formed by Japanese manufacturing firms in foreign countries. We plan to use secondary data obtained from the databases Overseas Japanese companies, Nikkei Economic Electronic Databank System and SDC Platinum of Thomson Reuters. We examine a network in which Japanese firms are linked to equity alliances and conduct statistical regressions and survival analysis on these alliances to explore the relationship between partners social asymmetry and alliance longevity. The expected outcome of this project is one academic article to be published on a top-tier journal in management field. This is a joint project with two major researchers, Dr. Tianyou Hu from Management and Marketing Department, KFUPM and Professor Andrew Delios from National University of Singapore, who will co-author the publications based on this project. The requested funding will be spent on useful data, software, and hardware. It should also cover the compensation of the research team, as well as the cost of attending conferences or seminars.