How does a partner's acquisition affect thevalue of the firm's alliance with that partner?
How does an acquisition initi-ated by a firm’s alliance partner affect the value thatthe firm can create and capture from its alliance withthat partner? We conjecture that the similarity betweenthe businesses of the firm and its partner’s acquisitiontarget restricts the firm’s ability to create and capturevalue from its alliance, whereas the complementaritybetween their businesses enhances the firm’s gain fromits alliance. We further expect relational embeddednessbetween the firm and its partner to mitigate the com-petitive tension associated with similarity while rein-forcing synergies ascribed to complementarity. Ouranalysis of 361 firms and their 590 alliances with91 partners that acquired 164 targets during 2000–2016supports our predictions about business similarity andcomplementarity but refutes those concerning rela-tional embeddedness
