When the weak are mighty: A two-sided matching approach to alliance performance
Alliance partners often struggle with identifying what their contributions and their partner’s contribution are to the alliance performance. We use a new method to identify each side’s contribution to their alliance. Our findings offer a few recommendations to firms forming similar alliances. First, we find that the less central partner in the business network has greater impact on the alliance performance due to their ability to diffuse more valuable information to the market. Second, our results suggest that product input quality that is relatively unknown impacts alliance performance more than low and average quality. Alliance partners may benefit more from experimenting with unknown inputs. Third, more central actors may reduce spending on mass communications if valuable information comes to the market through their less central partners.
