City Research Online

Abstract

Firms can govern their alliances through contractual agreements or equity joint ventures, the latter involving the shared ownership of a newly formed legal entity. This paper argues that the governance choice in a new alliance can be a lever for a firm to manage interdependencies in its alliance portfolio. We examine two related ideas. The first is that the choice of governance structure for a new alliance depends on the composition of a firm’s alliance portfolio. The second is that this governance choice has implications for the nature of the firm’s innovation outputs. Using data on U.S.-listed dedicated biotechnology firms, we find that firms are more likely to govern a new alliance through a contractual agreement when the accessed resources are similar to the resources available in their existing alliance portfolio. This choice also increases innovation in these similar resource domains. In contrast, firms are more likely to choose an equity joint venture when the accessed resources are complementary to their existing alliance portfolio, a choice that increases innovation in these complementary resource domains. Our findings extend the alliance portfolio perspective by linking portfolio interdependencies to the governance choices in new alliances and their implications for innovation.

Publication Type:	Article
Additional Information:	© 2026 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments:	Bayes Business School Bayes Business School > Faculty of Management
SWORD Depositor:	Symplectic Administrator

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