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Authors with many theoretical and managerial perspectives argue that businesses commercializing technologically complex goods benefit when they collaborate closely with other businesses. Collaboration is viewed as a means for businesses to overcome competency limitations and to achieve the close configuration of components required for complex goods. We predict that collaborative relationships ofen assist businesses to produce complex goods, but that the relationships might also cause problems for the collaborating businesses. We find that firms using development-oriented and marketing-oriented collaborative relationships in the hospital sofhvare systems industry are less likely to shut down than businesses that follow independent approaches when the environment changes gradually, but businesses using collaborative relationships are sometimes susceptible to being acquired by other firms. Following a sudden environmental shock, businesses with collaborative relationships for activities central to the shock became more likely to shut down, while businesses with collaborative relationships for activities outside the focus of the shock became more likely to survive. The study critically evaluates and tests the widely stated but little-tested argument that interfirm collaboration is usually beneficial. The results address the issue of whether organizational choices affect comparative business performance. This paper investigates the survival of businesses that use collaborative relationships with other firms to commercialize complex goods. A growing literature has identified many benefits of interfirm collaboration. Several recent studies argue that businesses that collaborate closely with other organizations in order to develop and market complex goods will be more successful than businesses that operate independently (Jorde and

What explains differences in firms' abilities to acquire competitive capabilities? In this paper we propose that embeddedness, in terms of firms' network of bridging ties and linkages to regional institutions, are important sources of variation in firms' acquisition of competitive capabilities. We argue that firm networks rich in bridging ties and firms' participation in regional institutions are critical vehicles for accessing new information, ideas, and opportunities leading to the acquisition of competitive capabilities in geographical clusters. Hypotheses are tested on a stratified random sample of 227 job shop manufacturers located in several regions of the US Midwest using data gathered from a mailed questionnaire. Results from structural equation modeling broadly support the embeddedness hypotheses and suggest a number of novel insights about the link between firms' networks and competitive capabilities.

This paper investigates the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms. We show that alliance outcomes vary systematically across link and scale alliances. Link alliances are interfirm partnerships to which partners contribute different capabilities, while scale alliances are partnerships to which partners contribute similar capabilities. We find that partners are more likely to reorganize or take over link alliances than scale alliances. By contrast, scale alliances are more likely to continue without material changes. The two types of alliances are equally likely to shut down, at similar ages. These results support the view that link alliances lead to greater levels of learning and capability acquisition between the partners than do scale alliances. Copyright © 2000 John Wiley & Sons, Ltd. This study investigates the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms. We define strategic alliances as arrangements between two or more

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Economists have become increasingly frustrated with the textbook model of the firm. The "firm " of intermediate microeconomics is a production function, a mysterious "black box" whose insides are off-limits to respectable economic theory (relegated instead to the lesser disciplines of management, organization theory, industrial psychology, and the like). Though useful in certain contexts, the textbook model has proven unable to account for a variety of realworld business practices: vertical and lateral integration, geographic and product-line diversification, franchising, long-term commercial contracting, transfer pricing, research joint ventures, and many others. As an alternative to viewing the firm as a production function, economists are turning to a new body ofliterature that views the firm as anorganization, itself worthy of economic analysis. This emerging literature is the bestdeveloped part of what has come to be called the "new institutional economics."' The new perspective has deeply enhanced and enriched our understanding of firms and other organizations, such that we can no longer agree with Ronald Coase's 1988 statement that "[wlhy firms exist, what determines the number of firms, what determines what firms do... are not questions of interest to most economists " (Coase 1988a, p. 5).The new theory is not without its critics; Richard Nelson (1991), for example, objects that the new institutional economics tends to downplay discretionary differences among firms. Still, the new institutional economics-in particular, agency theory and transaction cost economics-has been *Peter G. Klein is assistant professor of economics at the University of Georgia. He

Businesses often benefit by forming alliances with other firms but risk becoming dependent on their partners. We discuss two situations in which dependence may create serious problems: first. if a partner shuts down and. second. if a partner forms a relationship with a new partner. We examine collaborative relationships fo rmed by businesses operating in the U.S. hospital software systems industry during the 1961-91 period. We find that businesses faced increased risk of dissolution if they did not form new partnerships after partners shut down or formed collaborative relationships with new pa rtners. The results have implications for del-eloping an evolutionary theory of business strategy and performance. Our approach implies that the performance of a focal business often depends 011 how the strategies of its business partners evolve over time. An evolutionary theory of strategy must incorporate key characteristics of actions and relationships throughout a web of business partnerships. The dual nature of interfirm relationships. which both help a business survive at one time and inhibit its ability to adapt at another. helps explain why so many successful businesses fail when their environments change. Formal interfirm collaboration has become an important means by wh ich busine sses in many industries gain access to capabilities needed to compete in changing markets. Empirical research suggests that collaborating firms sometimes realize corporate financial benefits (Berg, Duncan,

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This paper tests empirically the hypothesis that the greater the intangibility of a firm’s resources, the greater the sustainability of its competitive advantage. Resource intangibility is measured by: (1) Tobin’s q and (2) the predicted value from a hedonic regression of q on several accounting measures of intangibles. Sustainability is measured by the persistence of firm-specific profits. Using a dynamic panel data regression model, I find that intangibles play an effective role in sustaining a firm’s competitive advantage, as predicted by the resource-based view of the firm. However, the results suggest that intangibles can also lock firms into persistent disadvantages.

and Keith Pavitt helped improving along various drafts of the work. 1 2