Alliance Portfolios And Firm Performance: The Moderating Role Of Firm Strategy And Resources

This paper uses Porter’s generic strategies and the resource-based view of alliances to address the question: which firms benefit more from greater alliance participation? I argue that firms pursuing low-cost strategies will enjoy greater performance benefits from their portfolio of alliances than firms pursuing differentiation strategies. I also argue that smaller firms will enjoy greater performance benefits from their alliance portfolios compared to large firms. Finally, I argue that low-cost firms will benefit more from alliances with partners in closely-related industries while differentiators will benefit more from alliances with partners in unrelated industries. Using a multi-industry panel of 415 largest U.S. publicly-traded companies spanning the years 1998-2009, I find support for these hypotheses. These results contribute to our understanding of firm-level strategies and resource endowments for the overall performance contributions of firms’ alliance portfolios.