GOVERNING STRATEGIC ALLIANCES

Assuming that information about the participants in the network circulates over the ties comprising it, firms’ structural positions – defined in this chapter by their location in the network of past strategic collaborations – should affect their general reputations as collaborators and the knowledge that structurally proximate organizations possess about their past behavior. In turn, the information benefits associated with different network positions should influence the types of governance structures and contractual features that appear in new alliances. This chapter examines how the positions of biotechnology firms in the established network of strategic alliances influences one of the important contractual terms of new partnerships: whether or not one partner finances the activities of its counterparty as part of the deal.