Prior alliances with targets and acquisition performance in knowledge-intensive industries

Organization Science

Volumn 21, Issue 5, 2010, Pages 1072-1091

  Zaheer, Akbar ^a   Hernandez, Exequiel ^a   Banerjee, Sanjay ^a  

^a UNIVERSITY OF MINNESOTA   (United States)

Author keywords

Acquisition performance; Alliances; Information asymmetry; Knowledge intensive industries; Mergers and acquisitions; Partner specific absorptive capacity; Strong alliances

Indexed keywords

EID: 77957047154     PISSN: 10477039     EISSN: 15265455     Source Type: Journal    
DOI: 10.1287/orsc.1100.0528     Document Type: Article

References (104)

1. Akerlof, G. A. 1970. The market for "lemons": Quality for uncertainty and the market mechanism. Quart. J. Econom. 84(3) 488-500.
2. Anand, B., T. Khanna. 2000a. Do firms learn to create value? The case of alliances. Strategic Management J. 21(3) 295-315.
3. Anand, B., T. Khanna. 2000b. The structure of licensing contracts. J. Indust. Econom. 48(1) 103-135.
4. Andrade, G., M. Mitchell, E. Stafford. 2001. New evidence and perspectives on mergers. J. Econom. Perspectives 15(2) 103-120.
5. Ariño, A., J. de la Torre. 1998. Learning from failure: Towards an evolutionary model of collaborative ventures. Organ. Sci. 9(3) 306-325.
6. Arrow, K. J. 1974. The Limits of Organization. Norton, New York.
7. Badaracco, J. 1991. The Knowledge Link. Harvard Business School Press, Boston.
8. Balakrishnan, S., M. P. Koza. 1993. Information asymmetry, adverse selection and joint-ventures: Theory and evidence. J. Econom. Behav. Organ. 20(1) 99-117.
9. Barney, J. 1991. Firm resources and sustained competitive advantage. J. Management 17(1) 99-120.
10. Barney, J. B. 1988. Returns to bidding firms in mergers and acquisitions: Reconsidering the relatedness hypothesis. Strategic Management J. 9(Summer) 71-78.
11. Bharadwaj, A. 2000. A resource-based perspective on information technology capability and firm performance: An empirical investigation. MIS Quart. 24(1) 169-196.
12. Bleeke, J., D. Ernst, eds. 1993. Collaborating to Compete: Using Strategic Alliances and Acquisitions in the Global Marketplace. Wiley, New York.
13. Bower, J. L. 2001. Not all M&As are alike-And that matters. Harvard Bus. Rev. 79(3) 92-101.
14. Bowman, E. H., D. Hurry. 1993. Strategy through the option lens: An integrated view of resource investments and the incremental-choice process. Acad. Management Rev. 18(4) 760-782.
15. Bradley, M., A. Desai, E. Kim. 1988. Synergistic gains from corporate acquisitions and their division between the stockholders of target and acquiring firms. J. Financial Econom. 20(11) 987-1018.
16. Burt, R. 1992. The social structure of competition. N. Nohria, R. Eccles, eds. Networks and Organizations: Structure, Form and Action. Harvard University Press, Boston, 57-91.
17. Capron, L., N. Pistre. 2002. When do acquirers earn abnormal returns? Strategic Management J. 23(9) 781-794.
18. Capron, L., P. Dussauge, W. Mitchell. 1998. Resource redeployment following horizontal acquisitions in Europe and North America, 1988-1992. Strategic Management J. 19 631-661.
19. Chatterjee, S., M. H. Lubatkin, D. M. Schweiger, Y. Weber. 1992. Cultural differences and shareholder value in related mergers: Linking equity and human capital. Strategic Management J. 13(5) 319-334.
20. Chen, S.-F. S., J.-F. Hennart. 2004. A hostage theory of joint ventures: Why do Japanese investors choose partial over full acquisitions to enter the United States? J. Bus. Res. 57(10) 1126-1134.
21. Chi, T. 1994. Trading in strategic resources: Necessary conditions, transaction cost problems, and choice of exchange structure. Strategic Management J. 15(4) 271-290.
22. Coff, R. W. 1999. How buyers cope with uncertainty when acquiring firms in knowledge-intensive industries: Caveat emptor. Organ. Sci. 10(2) 144-161.
23. Cohen, W. M., D. A. Levinthal. 1990. Absorptive capacity: A new perspective on learning and innovation. Admin. Sci. Quart. 35(1) 128-152.
24. Contractor, F. J., P. Lorange. 1988. Cooperative Strategies in International Business: Joint Ventures and Technology Partnerships Between Firms. Lexington Books, Lexington, MA.
25. Cook, T. D., D. T. Campbell. 1979. Quasi-Experimentation: Design and Analysis Issues for Field Settings. Houghton Mifflin Company, Boston.
26. Doukas, J., N. Travlos. 1988. The effect of corporate multinationalism on shareholders' wealth: Evidence from international acquisitions. J. Finance 43(5) 1161-1175.
27. Dyer, J. H., H. Singh. 1998. The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Acad. Management Rev. 23(4) 660-679.
28. Fama, E., L. Fisher, M. Jensen, R. Roll. 1969. The adjustment of stock prices to new information. Internat. Econom. Rev. 10(1) 1-21.
29. Farrell, K., D. A. Whidbee. 2000. The consequences of forced CEO succession for outside directors. J. Bus. 73(4) 597-627
30. Finkelstein, S., Y. S. Choi, S. T. Tran. 1998. Cisco Systems Inc. and the networking equipment industry. Case study, The Amos Tuck School, Dartmouth College, Hanover, NH.
31. Garette, B., P. Dussauge. 2000. Alliances versus acquisitions: Choosing the right option. Eur. Management J. 18(1) 63-69.
32. Giliberto, M. S., N. P. Varaiya. 1989. The winner's curse and bidder competition in acquisitions: Evidence from failed bank auctions. J. Finance 44(1) 59-75.
33. Graebner, M. E. 2004. Momentum and serendipity: How acquired leaders create value in the integration of technology firms. Strategic Management J. 25(8-9) 751-777.
34. Granovetter, M. S. 1973. The strength of weak ties. Amer. J. Sociol. 78(6) 1360-1380.
35. Granovetter, M. 1985. Economic action and social structure: The problem of embeddedness. Amer. J. Sociol. 91(3) 481-510.
36. Gulati, R. 1995. Does familiarity breed trust? The implications of repeated ties for contractual choice in alliances. Acad. Management J. 38(1) 85-112.
37. Gulati, R. 1999. Network location and learning: The influence of network resources and firm capabilities on alliance formation. Strategic Management J. 20(5) 397-420.
38. Gulati, R., M. Gargiulo. 1999. Where do interorganizational networks come from? Amer. J. Soc. 104(5) 439-493.
39. Gulati, R., D. Lavie, H. Singh. 2009. The nature of partnering experience and the gains from alliances. Strategic Management J. 30(11) 1213-1233.
40. Hagedoorn, J., G. Duysters. 2002. External sources of innovative capabilities: The preference for strategic alliance or mergers. J. Management Stud. 39(2) 177-188.
41. Hamel, G., Y. L. Doz, C. K. Prahalad. 1989. Collaborate with your competitors and win. Harvard Bus. Rev. 67(1) 133-139.
42. Haspeslagh, P., D. Jemison. 1991. Managing Acquisitions: Creating Value Through Corporate Renewal. Free Press, New York.
43. Hayward, M. L. A. 2002. When do firms learn from their acquisition experience? Evidence from 1990 to 1995. Strategic Management J. 23(1) 21-39.
44. Healy, P., K. Palepu, R. Ruback. 1992. Does corporate performance improve after mergers? J. Financial Econom. 31(2) 135-175.
45. Heckman, J. 1979. Sample selection bias as a specification error. Econometrica 47(1) 153-161.
46. Hennart, J.-F. 1988. A transaction cost theory of equity joint ventures. Strategic Management J. 9(4) 361-374.
47. Hennart, J.-F., S. Reddy. 1997. The choice between mergers/acquisitions and joint ventures: The case of Japanese investors in the United States. Strategic Management J. 18(1) 1-12.
48. Hennart, J.-F., S. Reddy. 2000. Digestibility and asymmetric information in the choice between acquisitions and joint ventures: Where's the beef? Strategic Management J. 21(2) 191-193.
49. Hitt, M., J. Harrison, R. D. Ireland. 2001. Mergers and Acquisitions: A Guide to Creating Value for Stakeholders. Oxford University Press, New York.
50. Hoang, H., F. T. Rothaermel. 2005. The effect of general and partner-specific alliance experience on joint R&D project performance. Acad. Management J. 48(2) 332-345.
51. Huber, P. J. 1967. The behavior of maximum likelihood estimates under nonstandard conditions. Proc. Fifth Berkeley Sympos. Math. Statist. Probab. University of California Press, Berkeley, 221-233.
52. Hymer, S. H. 1960. The International Operations of National Firms: A Study of Direct Foreign Investment. MIT Press, Cambridge, MA.
53. Inkpen, A. 1998. Learning, knowledge acquisition, and strategic alliances. Eur. Management J. 16(2) 223-229.
54. Jemison, D. B., S. B. Sitkin. 1986. Corporate acquisitions: A process perspective. Acad. Management Rev. 11(1) 145-163.
55. Jensen, M., R. Ruback. 1983. The market for corporate control: The scientific evidence. J. Financial Econom. 11(1-4) 5-50.
56. Johanson, J., J. Vahlne. 1977. The internationalization process of the firm-A model of knowledge development and increasing foreign market commitments. J. Internat. Bus. Stud. 8(1) 23-32.
57. Kale, P., H. Singh, H. Perlmutter. 2000. Learning and protection of proprietary assets in strategic alliances: Building relational capital. Strategic Management J. 21(3) 217-237.
58. Kalwani, M., N. Narayandas. 1995. Long-term manufacturer-supplier relationships: Do they pay off for supplier firms? J. Marketing 59(1) 1-17.
59. Kaplan, S., M. Weisbach. 1992. The success of acquisitions: Evidence from divestitures. J. Finance 47(1) 107-138.
60. Khanna, T., R. Gulati, N. Nohria. 1998. The dynamics of learning alliances: Competition, cooperation, and relative scope. Strategic Management J. 19(3) 193-210.
61. Kimbrough, M. D. 2005. The effect of conference calls on analyst and market underreaction to earnings announcements. Accounting Rev. 80(1) 189-201.
62. Kogut, B. 1988. The stability of joint ventures: Reciprocity and competitive rivalry. J. Indust. Econom. 38(2) 183-198.
63. Kogut, B. 1991. Joint ventures and the option to expand and acquire. Management Sci. 37(1) 19-33.
64. Kogut, B., U. Zander. 1992. Knowledge of the firm, combinative capabilities, and the replication of technology. Organ. Sci. 3(3) 383-397.
65. Kostova, T., S. Zaheer. 1999. Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Acad. Management Rev. 24(1) 64-81.
66. Krishnan, H. A., M. A. Hitt, D. Park. 2007. Acquisition premiums, subsequent workforce reductions and postacquisition performance. J. Management Stud. 44(5) 709-732.
67. Larson, A. 1992. Network dyads in entrepreneurial settings: A study of the governance of exchange relationships. Admin. Sci. Quart. 37(1) 76-104.
68. Larsson, R., L. Bengtsson, K. Henriksson, J. Sparks. 1998. The interorganizational learning dilemma: Collective knowledge development in startegic alliances. Organ. Sci. 9(3) 285-305.
69. Li, D., L. Eden, M. A. Hitt, R. D. Ireland. 2008. Friends, acquaintances, or strangers? Partner selection in R&D alliances. Acad. Management J. 51(2) 315-334.
70. Liebeskind, J. P. 1996. Knowledge, strategy and the theory of the firm. Strategic Management J. 17(Winter) 93-108.
71. Maddala, G. S. 1983. Limited-Dependent and Qualitative Variables in Econometrics. Cambridge University Press, Cambridge, UK.
72. Malkiel, B. G. 2003. The efficient market hypothesis and its critics. J. Econom. Perspectives 17(1) 59-82.
73. Markides, C., C. Ittner. 1994. Shareholder benefits from corporate international diversification: Evidence from U.S. international acquisitions. J. Internat. Bus. Stud. 25(2) 343-366.
74. Marsden, P. 1990. Network data and measurement. Annual Rev. Sociol. 16 435-463.
75. Mergers & Acquisitions. 1999. Snapshot analysis. Mergers & Acquisitions: Dealmaker's J. 33(5) 49.
76. Monczka, R., K. Peterson, R. Handfield, G. Ragatz. 1998. Success factors in strategic supplier alliances: The buying company perspective. Decision Sci. 29(3) 553-573.
77. Mowery, D. C., J. E. Oxley, B. S. Silverman. 1996. Strategic alliances and interfirm knowledge transfer. Strategic Management J. 17(Winter) 187-221.
78. Nohria, N., C. Garcia-Pont. 1991. Global strategic linkages and industry structure. Strategic Management J. 12 105-124.
79. Nonaka, I. 1994. A dynamic theory of knowledge creation. Organ. Sci. 5(1) 14-37.
80. Nonaka, I., H. Takeuchi. 1995. The Knowledge Creating Company. Oxford University Press, New York.
81. Nonaka, I., G. von Krogh. 2009. Tacit knowledge and knowledge conversion: Controversy and advancement in organizational knowledge creation theory. Organ. Sci. 20(3) 635-652.
82. Polanyi, M. 1963. The Tacit Dimension. Peter Smith, Gloucester, MA.
83. Porrini, P. 2004. Can a previous alliance between an acquirer and a target affect acquisition performance? J. Management 30(4) 545-562.
84. Powell, W. 1990. Neither market nor hierarchy: Network forms of organization. Res. Organ. Behav. 12 295-336.
85. Puranam, P., H. Singh, S. Chaudhuri. 2009. Integrating acquired capabilities: when structural integration is (un)necessary. Organ. Sci. 20(2) 313-328.
86. Puranam, P., H. Singh, M. Zollo. 2006. Organizing for innovation: Managing the coordination-autonomy dilemma in technology acquisitions. Acad. Management J. 49(2) 263-280.
87. Robson, M. J., C. S. Katsikeas, D. C. Bello. 2008. Drivers and performance outcomes of trust in international strategic alliances: The role of organizational complexity. Organ. Sci. 19(4) 647-665.
88. Rowley, T. B., D. Behrens, D. Krackhardt. 2000. Redundant governance structures: An analysis of structural and relational embed-dedness in the steel and semiconductor industries. Strategic Management J. 21(3) 369-386.
89. Sarkar, M., P. S. Aulakh, A. Madhok. 2009. Process capabilities and value generation in alliance portfolios. Organ. Sci. 20(3) 583-600.
90. Seth, A. 1990. Sources of value creation in acquistions: An empirical investigation. Strategic Management J. 11(6) 431-446.
91. Singh, H., F. Harianto. 1989. Manager-board relationships, takeover risk, and the adoption of golden parachutes. Acad. Management J. 32(1) 7-24.
92. Singh, H., C. A. Montgomery. 1987. Corporate acquisition strategies and economic performance. Strategic Management J. 8(4) 377-386.
93. Sirower, M. 1997. The Synergy Trap: How Companies Lose the Acquisition Game. Free Press, New York.
94. Szulanski, G. 1996. Exploring internal stickiness: Impediments to the transfer of best practices within the firm. Strategic Management J. 17(Winter) 27-43.
95. Teece, D. J. 1980. Economics of scope and the scope of the enterprise. J. Econom. Behav. Organ. 1 223-369.
96. Uhlenbruck, K., M. A. Hitt, M. Semadeni. 2006. Market value effects of acquisitions involving Internet firms: A resource-based analysis. Strategic Management J. 27(10) 899-913.
97. Uzzi, B. 1999. Embeddedness in the making of financial capital: How social relations and network benefit firms seeking financing. Amer. Sociol. Rev. 64(4) 481-505.
98. Vanhaverbeke, W., G. Duysters, N. Noorderhaven. 2002. External technology sourcing through alliances or acquisitions: An analysis of the application specific integrated circuits industry. Organ. Sci. 13(6) 714-733.
99. von Hippel, E. 1988. The Sources of Innovation. Oxford University Press, New York.
100. Walsh, J. P. 1988. Top management turnover following mergers and acquisitions. Strategic Management J. 9(2) 173-183.
101. Williamson, O. 1985. The Economic Institutions of Capitalism. Free Press, New York.
102. Zaheer, S. 1995. Overcoming the liability of foreignness. Acad. Management J. 38(2) 41-63.
103. Zaheer, A., B. McEvily, V. Perrone. 1998. Does trust matter? Exploring the effects of interorganizational and interpersonal trust on performance. Organ. Sci. 9(2) 1-20.
104. Zollo, M., J. J. Reuer, H. Singh. 2002. Interorganizational routines and performance in strategic alliances. Organ. Sci. 13(3) 339-352.