The influence of position in a strategic alliance network on firm performance

EXECUTIVE SUMMARY This research deals with the impact the position of a firm in a strategic alliance network has on different forms of firm performance. Because of the great importance of innovation in contemporary literature, a large part of the focus lies on the innovation performance of the firms within this network. Besides this focus on innovativeness, some financial performance measures are assessed as well. The thesis starts with a discussion is started on the literature on innovation and shows that innovation exists in may different forms. To make the discussion on innovation a bit clearer and explain what innovation really is, I have chosen to explain the different kinds of innovation and the opinion of a few important scholars who wrote about this topic. Then, a detailed description of alliances and the motives to form alliances. Subsequently, a consideration is given regarding network perspectives. Based on the literature that is treated, some hypotheses are created that are tested in the empirical research part of the thesis. The different currents of literature, showed positive effects between positional advantages within a inter-firm network and the different forms of performance of the firm. The first two hypotheses test the impact of two different forms of network centrality on the innovation performance of the firm. The second two hypotheses use the same two forms of network centrality, but this time the focus is on the financial performance of the firm. The collection of data used was executed by using the strategic alliance database SDC, the COMPUSTAT database, the USPTO database and the UCINET 6 software. In the SDC database I found different companies that were engaged in a strategic R&D alliance. For these companies, I calculated the two forms of network centrality in UCINET 6. Then, I looked for which companies there was financial performance and company characteristics data available in the COMPUSTAT database. For the companies that could be found in this database, I collected the innovation performance measure of ‘patents’ in the USPTO patent database. The dataset that is created provides data to test the different hypotheses that were formulated. The findings however do not support any of the proposed hypotheses. The findings show that the matter of embeddedness, in terms of different network centrality measures, of firms in a strategic alliance R&D network has no impact on firm performance; neither on innovation measures nor financial measures. In this way the central research question of the thesis is not endorsed and I can conclude that position does not affect the performance of the firm in a strategic alliance network, based on R&D alliances made by different companies. This study will however provide the reader with additional insight to the existing literature on a wide array of topics and will add to the different network perspectives.