Identity and initial structure in inter-firm alliances: a social identity perspective

Purpose – The purpose of this paper is to examine how firms use the identities of their alliance partners in choosing initial governance structures in strategic alliances. It proposes that social identity from the perspective of an established firm participating in an inter-firm alliance can be constructed on the basis of ownership categories and market categories of the firm’s alliance partners. Design/methodology/approach – The study focusses on a sample of 478 alliances involving 36 focal firms in the US semiconductor industry over a nine-year period (1995-2003). The sample is analyzed using logistic regression methods. Findings – The author finds evidence suggesting that joint venture (JV) structures are more likely when an alliance has more partners that identify as privately held firms or subsidiaries of other firms. The results also suggest that JV structures are more likely when an alliance involves strong product market identity with partners and less likely when an alliance involves strong geographic identity with partners. Originality/value – These findings provide some novel insights into potential heuristics that alliance managers use in making initial alliance structure decisions. In particular, this paper contributes to a growing stream of research that considers the optimal alliance structures for different partner configurations by showing the potential influence of partners’ identities in simplifying these important decisions.