Review of Financial Studies Vol. 21 No. 2 2008
Strategic Alliances and the Boundaries of the Firm
Abstract
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. , Oxford University Press.
- DOI
- 10.1093/rfs/hhm084
- Volume
- 21
- Issue
- 2
- Pages
- 649-681
- Language
- en
- Sources
- openalex crossref