The formation of new inter-firm relationships: a UK offshore wind sector analysis

Abstract

Purpose

The focus of this paper is to understand the initial formation of inter-firm relationship with the ultimate aim to form a long-term relationship in offshore-wind sector. The research question is “How and why new inter-firm relationships are built in nascent industries with highly uncertain business environments?”

Design/methodology/approach

Longitudinal case studies of three pairs of new inter-firm relationships based on interviews and other archival data are analysed.

Findings

Not all new inter-firm relationships progressed to expansion stage, largely owing to incompatibility and uncertainty. In some cases incompatibility could be rectified by trust and sharing of information. High trust is required to move the relationship from awareness to exploration stage. Investment in R&D is required to move the relationship from exploration to expansion. Innovation complementarity is the key in OSW sector.

Practical implications

Provide insights into how new inter-firm relationships in OSW sector could fail or be built up. High trust at the beginning helps to lower risk and encourages further investment.

Originality/value

Inform inter-firm relationship theories under high market risk and political uncertainty, especially for OSW sector.

Citation

Hennelly, P. and Wong, C.Y. (2016), "The formation of new inter-firm relationships: a UK offshore wind sector analysis", International Journal of Energy Sector Management, Vol. 10 No. 2, pp. 172-190. https://doi.org/10.1108/IJESM-05-2015-0001