We suggest and provide empirical evidence that the bargaining power of alliance partners stemming from their prominence in alliance networks influences the ex-ante allocation of value capturing rights in high-tech alliance contracts. Network prominence can enhance the availability of alternative...

We analyze optimal fi nancial contracts when the specifi city of investments is endogenous. Specialization decreases the liquidation value of assets, but it also improves the project's long term productivity. While the first eff ect is known to make financing more diffi cult, we show that the...