Search results

The purpose of this paper is to examine how domestic airlines benefit when they have code sharing arrangements with international carriers.

The data for this research study have been collected primarily from three sources. The first database, the digest of statistics no. 400 is from International Civil Aviation Organization (ICAO) based in Montreal, Canada. The second source of data comes from the Airline Business database. The third source of data for this research study is from Official Airline Guide (OAG). Ten years of data from 1994 to 2004 are collected from the databases of ICAO, Airline Business and also from individual airlines. Data such as the revenue passenger miles (RPMs) and load factor are obtained from the ICAO database and data such as alliance pattern are culled from the Airline Business database.

This research study reveals that code sharing agreements between a domestic and international airline will benefit the former by way of increased RPMs, passenger load factor (PLF), and market share. However, the coefficients of the hypothesized variables suggest that the initial gains achieved by the domestic airlines by way of increased RPMs start to erode in the long run. Thus, a domestic airline must form a code sharing agreement with an international airline at the earliest, so as to get the initial increase in RPMs. The effect of code sharing on the market share of domestic airlines is explicit and consistent throughout this research study. The second dimension in the code sharing is the multiple alliances between domestic and international airlines. Multiple alliances refer to an airline having more than one code sharing agreement with international carriers. The third factor in this sequence of hypotheses is equity investment by international carriers in domestic airlines. The relationship between equity investment and its influence on the performance of the targeted firm is always an interesting topic explored by both the academic researchers and practitioners. However, in this study, the regression results do not support the hypothesis. That means that mere equity investment by international carriers in domestic airlines may not result in increased RPMs, load factor and the market share for domestic airlines. The interesting finding in this particular section is the influence of the large size of the alliance partners on all the three dependent variables; RPMs, PLF, and the market share. Therefore, we can conclude that if both the airlines are large enough and they form code sharing agreements, then this may result in increased RPMs, PLFs, and market share for the domestic airlines. Similarly, the study supports the premise that if the partners are unequal, then the domestic airlines may not be able to increase the RPMs, load factor, and the market share.

This paper reveals that code sharing arrangements reached earlier in the competition is better as the benefits tend to reduce after a certain period of time.

Cooperative strategies, both domestic and foreign, have become an important component of the strategic repertoire of firms. Various forms of interfirm alliances are redefining and transforming the very nature of competition. Considering their importance, a solid understanding of their fundamental dynamics is necessary. Different forms of alliances exist: from those that emerge because partners have some preexisting advantages such as geographic proximity or shared history to those that arise because third parties such as governments have created the enabling environment. Looking at the context and operational dynamics of various alliance configurations may help our understanding of how to manage them. This paper presents four configurations or clusters of alliances based on their origins and link the context to operational dynamics. The policy and research implications of the paper are also presented.

Develops the benefits of both horizontal and vertical domestic strategic alliances to meet the challenge of growing international cartels and the Japanese keiretsu. Looks into the crises which force a new paradigm to be considered. The paradigm, which should guide the development of channel marketing theory, must use both economic and non‐economic concepts. Discusses the economic political paradigm concept which brings the issue of relationships into consideration. The Japanese concept of zaibatsu, or the modern version keiretsu, is built around relationships. Domestic industries may have to adopt a version of these concepts to compete in fierce international markets. Lists eight benefits of strategic alliances and develops a matrix for measuring strategic alliances for further consideration.

Here we consider the various ways in which airlines integrate their business activities. The thin markets, long distances, poor infrastructure, and challenging terrain over which many airlines based in developing countries operate can make it difficult to reap the economies of scale, scope, and density that carriers in more developed nations enjoy. There also remain institutional barriers to cross border trade in airline services. As a response to this, airlines from developing regions “cooperate” in a number of ways. This may involve multinational ownership, code sharing, or joint ventures. The rationale for these actions, together with discussion of the outcomes of some of them, is considered here.

The purpose of this paper is to understand the mechanisms of partner selection from the transaction cost economics’ viewpoint. This paper reveals that a firm’s choice to initiate a new alliance with a new partner or form a repeated alliance with an existing partner depends on contract terms and the relative characteristics of partners.

The authors examine 555 alliances in high-tech industries from 2001 to 2009, which the authors collected from secondary sources, including the Securities Data Company Platinum and Compustat databases. The authors use a logit model to reveal the effect of contract terms and relative partner characteristics on repeated partnership.

The results show that repeated partnership is less likely to be combined with equity sharing. Repeated partnership is also negatively associated with the functional scope of a new alliance. Finally, a firm is more likely to enter a repeated partnership when its partner is from a different country.

This research provides new insights into how the choice of an alliance partner depends on contract terms and the relative characteristics of partners. Identifying factors associated with partner selection helps us understand the fundamental mechanisms of initiating a new alliance. It allows focal firms to foresee the behavior of their peers or competitors in certain circumstances and thus provides important insights for developing corresponding strategies more effectively.

Code-sharing, a phenomenon observed in international airline markets, has emerged as an important form of alliance in the domestic U.S. airline industry. Unlike international markets where code-share agreements were often the only way for a carrier to enter into a route serving another country, the post-1980 U.S. airline industry has enjoyed de facto free entry and exit. However, the financial conditions of the mid-1990s combined with various constraints on airport and airspace capacity led domestic carriers to experiment with code-sharing.

Strategic alliances have a variety of governance structures that can be broadly classified as joint ventures, minority equity alliances, and contractual alliances. This paper seeks to empirically examine the roles of four key determinants of governance structure choice, namely, joint R&D and joint marketing objectives, alliance management experience, and international partners.

Several hypotheses are developed regarding governance structure choice and are tested with data from 765 alliances. A multinomial logistic regression (logit) model is used for statistical analysis, with five control variables.

All hypotheses are supported, so that the roles of alliance objectives, alliance management experience, and international partners are demonstrated as being significant as determinants of governance structure choice in alliances.

Limitations stem from the data being from a single source, one that also relies on press announcements that may be biased toward larger alliances.

Briefly, alliance managers should find it useful to assess the relative presence of the four determinants of structural choice studied in this investigation in order to make an informed selection of the appropriate governance structure.

The study contributes to the knowledge of the key determinants of governance structure choice in strategic alliances by examining empirically, with a large sample of alliances from various industries, the significant roles of four factors, namely, joint R&D and joint marketing objectives, alliance management experience, and international partners.

Turkey represents a fascinating case in late industrialization or “late late developing”. Under the Kemalist tradition of continuous modernization, the Turkish context of the 1990s, which heavily involves the military establishment, may actually support high‐technology sectors. Such a conclusion is derived from an examination of economic and geopolitical realities, and benchmarks provided by highly industrialized countries. A strategic TOWS analysis underlines the strengths, weaknesses, threats, and opportunities, of a hypothetical microelectronics industry. Strategies for such industry are suggested including international strategic alliances.

Based on a review of over 450 articles on multinational enterprises published in leading management journals from 1990‐2000, we identified eighteen issues that had engaged the attention of academic scholarship and evaluated their topical relevance. Ironically, very few of them addressed two of the most pressing issues facing business and society at the turn of the last millennium: terrorism and socio‐economic inequality. These glaring omissions suggest a gap between academic scholarship that focuses on “what is,” and research that speculates as to “what could be.” Suggestions are offered on how to close this important gap in the fi eld of international business.