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The purpose of this paper is to extend the line of research on the ex ante valuation of the economic payoff from strategic alliances. The paper links a firm's related pre‐alliance situation to an alliance announcement, to predict how investors value the alliance.

The researchers collected data on marketing alliances in the biotechnology and pharmaceutical industries. Using an empirical model, three hypotheses predicting how investors value alliances in the light of their knowledge of how the firm is doing before the alliance announcement were tested.

The findings indicate that investors assign higher value to marketing alliances for firms with lower inventory liquidity and product demand. Investors, in fact, rewarded firms with weak pre‐alliance positions, indicating that the alliance was perceived as a useful strategy to turnaround the weak situation.

As is common with other event study research, the study is unable to predict the long‐term relationship between alliance announcements and performance of the alliance. A positive evaluation at the time of the announcement may not necessarily translate into long‐term success.

This research provides an important lesson for firms hoping to reap financial rewards from their alliance announcements. Firms may do well to time such alliance announcements to correspond with their internal situations.

This paper is believed to be one of the first to consider an additional piece of firm information in addition to an alliance announcement to gauge investor valuation of alliances. The research therefore extends existing research and offers a more complete understanding of how investors value alliances at their formation. The findings should be of interest to firms contemplating alliances, and enhance understanding of investor decision making.

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Although existing partial theories contribute to scholarly understanding of strategic alliances, the lack of a comprehensive framework to explain strategic alliances is unfortunate. The purpose of this paper is to develop an integrated framework for maker‐buyer strategic alliance performance.

Drawing on the concept of embeddedness developed by Granovetter, this paper argues that maker‐buyer alliances are economic actions intended to pursue synergies; meanwhile, these economic actions are embedded in social contexts.

This paper argues that the economic goal of firms entering alliances is to combine their complementary resources to create synergies. To achieve this goal, managers must efficiently manage the economic problems associated with such alliances, including searching for partners with complementary resources, allocating value‐added activities correctly, establishing efficient interorganizational routines, and introducing proper governance structures. Furthermore, alliances are embedded in their social contexts. Firms are constrained by their specific social environments and behave accordingly, impacting their performance. It is difficult for firms to modify the contexts in which they are embedded without strong strategic intent. The social contexts in which firms are embedded may also be sources of sustainable competitive advantage or disadvantage.

Several managerial implications and future research directions are presented.

This study, by integrating economic and sociological theories into a framework and focusing on maker‐buyer alliances, depicts not only the full picture but also the necessary details of maker‐buyer alliances for scholars and practical managers.

The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network capability on performance in international trade and has three research objectives.

The first objective of the study relates to providing new insights into the international market development activities through the application of a network perspective. The chapter reviews the international business literature to ascertain the development of thought, the research gaps, and the shortcomings. This review shows that the network perspective is a useful and popular theoretical domain that researchers can use to understand international activities, particularly of small, high technology, resource-constrained firms.

The second research objective is to gain a deeper understanding of network capability. This chapter presents a model for the impact of network capability on international performance by building on the emerging literature on the dynamic capabilities view of the firm. The model conceptualizes network capability in terms of network characteristics, network operation, and network resources. Network characteristics comprise strong and weak ties (operationalized as foreign-market entry modes), relational capability, and the level of trust between partners. Network operation focuses on network initiation, network coordination, and network learning capabilities. Network resources comprise network human-capital resources, synergy-sensitive resources (resource combinations within the network), and information sharing within the network.

The third research objective is to determine the impact of networking capability on the international performance of SMEs. The study analyzes 11 hypotheses through structural equations modeling using LISREL. The hypotheses relate to strong and weak ties, the relative strength of strong ties over weak ties, and each of the eight remaining constructs of networking capability in the study. The research conducts a cross-sectional study by using a sample of SMEs drawn from the telecommunications industry in Ireland.

The study supports the hypothesis that strong ties are more influential on international performance than weak ties. Similarly, network coordination and human-capital resources have a positive and significant association with international performance. Strong ties, weak ties, trust, network initiation, synergy-sensitive resources, relational capability, network learning, and information sharing do not have a significant association with international performance. The results of this study are strong (R2=0.63 for performance as the outcome) and provide a number of interesting insights into the relations between collaboration or networking capability and performance.

This study provides managers and policy makers with an improved understanding of the contingent effects of networks to highlight situations where networks might have limited, zero, or even negative effects on business outcomes. The study cautions against the tendency to interpret networks as universally beneficial to business development and performance outcomes.

Strategic alliances involve uncertainty, interdependence, and vulnerability, which often create adverse situations. This paper seeks to understand how alliance managers respond to these adverse situations by examining the influence of four exchange variables on response strategies.

A scenario‐based experiment provides empirical support for a typology consisting of seven conceptually and empirically distinct response strategies: exit, opportunism, aggressive voice, creative voice, considerate voice, patience, and neglect.

The results indicate that economic satisfaction, social satisfaction, alliance‐specific investments, and the availability of attractive alternatives differentially and interactively affect response strategies.

The study offers two main contributions to alliance literature. First, the seven response strategies accurately represent reactions that alliance managers use to deal with adverse situations. Second, the study findings validate and extend previous alliance research by highlighting that a comprehensive response strategy typology is necessary to disentangle the effects of the four exchange conditions on response strategy use, which fosters theory development and managers' ability to manage their alliances effectively.

The study contributes to the process perspective on strategic alliances by highlighting the various response strategies that alliance managers use to deal with adverse situations and their antecedents.

Regional economic integration has been a major area of research in the field of international economics and international trade, with little attention being paid to the impact of these economic collaborations on the organizational strategies of firms within the economically integrated regions. By building on the organization‐environment relationship paradigm, this paper aims to address the impact of environmental changes associated with economic integration, market commonality and currency commonality, on the patterns and structures of strategic alliances within members of the economic community.

Using mixed linear models, the study looks at changes associated with the integration of the European Union and their effects on international alliances within the integrated area and among the various member countries.

The findings suggest that the emergence and the adoption of economic integration policies at the country level do impact the patterns and structures of strategic alliances practiced between member countries. Specifically, the adoption of common market policies among members of an economic community has implications on the pattern and structure of strategic collaborative relationships of firms within these member countries.

While regional economic integrations have accelerated, theoretical and empirical research addressing their impact on multinational strategies has yet to catch up.

In this paper we analyze the influence of transaction costs on the stock market reaction to global alliance formation. In particular, we analyze to what extent the stock market reacts negatively to the presence of attributes that increase motivation or coordination costs. We adopt a relational framework, analyzing the direct impact of these attributes not only on transaction costs but also on the potential synergies of the alliance and the incentives to invest in the relationship. Our results show that the stock market reacts negatively to transaction costs only in connection with free riding hazards.

The purpose of this paper is to examine whether marketing alliances create value for shareholders, and whether the results are robust across different business cycles.

Using standard event study methodology, abnormal returns (AR) were computed for 402 firms which formed marketing alliances in a 12‐month period covering three business time periods, namely bull, bear and post 9/11 periods. ANOVA and regression analyses were performed on cumulative abnormal returns (CAR).

Significant and positive AR were found on announcement day for firms forming marketing alliances. When the sample is segmented by market capitalization, small cap firms were found to stand to benefit the most, particularly when partnering with a large firm. During the bear market period, marketing alliances tend to benefit small cap firms and firms with low profitability, whereas during the bull market period, marketing alliances benefit firms with low asset utilization.

Results are limited by the accuracy of the models used to measure AR.

The results seem to suggest that smaller partners tend to benefit more from marketing alliance, and the effect changes with business cycle.

The paper analyses how the benefits of forming a marketing alliance are shared between partnering firms and how the different phases of business cycle influence the distribution of benefits.

We examine collaborative complexity arising from strategic alliances among competitors. In high technology industries, rapidly evolving and modular technologies increase the likelihood that collaborative alliances will develop between partners who also compete with one another. Partnering under these conditions involves choosing collaborative structures that foster the transfer and integration of some resources, while simultaneously protecting other resources from unintended transfer. Using resource-based, transaction cost, and industrial organization economic theories we develop a model to depict the risks and rewards of collaboration under different modes of competitive interdependence. Two dimensions underlie our conceptual model: resource interdependence and competitive interdependence. Resource interdependence is the degree of integration needed for the resources contributed by alliance partners as reflected in the nature of the resources and their co-specialization. Competitive interdependence gauges the similarity between partners in their overall strategic capabilities and customer markets. We conclude with a discussion of the contingent use of inter-organizational structures to enable partners to balance resource contributions and resource protection in collaborative-competitive relationships.

Alliances often turn into acquisitions (i.e., one alliance partner is acquired by the other). In these transitional governance trajectories, geography-related factors can play a crucial role. Factors like location and distance can notably influence the decision to acquire the alliance partner, as well as the performance implications of such a transition. However, existing studies on transitional governance tend to underemphasize the geographic dimension of the phenomenon. In this chapter, we take a first step toward connecting the field of transitional governance and the discipline of economic geography, which does emphasize location and distance as critical determinants of economic activities. We discuss how economic geography can inform the field of transitional governance and propose some promising avenues for future studies linking organization, place, and space in transitional governance trajectories.