Network Positions and Propensities to Collaborate: An Investigation of Strategic Alliance Formation in a High-Technology Industry

TLDR: In this paper, the authors developed a mapping of the firms' positions in an industry and applied this model in a longitudinal study of the formation of alliances between organizations, showing that firms in crowded positions and those with high prestige form alliances at the highest rates.

Abstract: I wish to acknowledge many helpful suggestions from Biil Barnett, Ron Burt, Glenn Carroll, Karel Cool, Mike Hannan, Jeff Pfeffer, Joel Podolny, and Jesper Sorensen, Comments from Mark Mizruchi and three anonymous reviewers greatiy improved this paper. Financial support for this research was provided by the FMC Scholar progfam at the University of Chicago, Graduate School of Business and from the State Farm Doctoral Dissertation Fellowship. The paper develops a net\/vork-based mapping of the technoiogicai positions of the firms in an industry and applies this model in a longitudinal study of the formation of alliances between organizations. In the analysis, the positions of high-technology firms in their competitive environment are stratified on two dimensions: crowding and prestige. Organizations in crowded positions are those that participate in technological segments in which many firms actively Innovate, and prestigious firms are those with a track record of developing seminal inventions. The study's principal empirical findings are that firms in crowded positions and those with high prestige form alliances at the highest rates. The statistical analyses, performed on a sample of semiconductor firms during a six-year period, demonstrate that crowding and prestige predict alliance formations at the firm level (which organizations establish the greatest number of alliances) and at the dyad level (which particular pairs of firms choose to collaborate).*