Abstract: In this paper we extend the research on partner choice by testing a matching model for syndication formation. Our analysis focuses on two key variables hitherto unexamined: partner prior financial performance and a network measure of partnering concentration. We estimate a variable’s contribution to partnership formation either as a complement (homophily) or substitute (heterophily). We find that financial performance is a complement, indicating that better performing firms choose each other, and that partnering concentration is also a complement, indicating that firms that are specialized (alternatively generalized) remain so in their new alliances. The data are U.S. venture capital syndications in the first round. We discuss the implications of the results for network development.

Abstract: Whereas prior literature extensively examined the role of tangible and intangible assets during mergers and acquisitions, little attention has been paid to relational assets, i.e. resources beyond organizational boundaries. However, in settings where interorganizational relationships are essential, there are extensive potential benefits stemming from synergies in strategic alliances of acquiring and acquired firms. We thus argue that acquisition performance increases when an acquired firm has relatively more relational resources. However, this effect is weaker when the acquired firm’s relationships overlap with the acquiring firm’s main business. Conversely, this effect will be stronger if the acquired firm’s relationships are well-established and when the acquired firm is central in the alliance network. The hypotheses are tested on a sample of acquisitions in the biopharma industry.

Abstract: The paper contributes to the literature on governance mode by studying the impact of internal technological capabilities - research and development (R&D), proximity with science, and both the novelty and quality of patents - on the choice between alliance and acquisition as modes of external technology sourcing. Based on the analysis of a comprehensive panel of 661 transactions made between 2000 and 2010 by 199 European firms operating in the high-tech software industry, we found that high R&D expenditures predict acquisition in case of high proximity with science, and predict alliance in case of high patent quality. Moreover, low R&D expenditures predict acquisition in case of low patent novelty. Implications for theory and practices are discussed.

Abstract: While inter-firm contracts (e.g., alliances) have garnered a great deal of attention, M&A contracts remain comparatively under explored. The purpose of a contract is for two parties to come to agreement on a deal, but the role of the contract after it is signed differs between alliances and M&A. An alliance contract sets the terms under which the parties will govern their exchange. An M&A contract, however, represents a shift to hierarchical governance and thus is more focused on the terms and conditions under which the transition to hierarchy will occur. In this paper, we explore these differences and discuss factors that influence M&A contract design.