Chapter 9: Structural Strategies for Mitigating Transaction Costs in Multipartner Alliances: An Empirical Examination

In this study, we examine the strategies adopted by partners in multipartner alliances. Drawing from the literature, we argue that the inherent tensions in strategic alliances are accentuated in multipartner alliances, resulting in higher expected transaction costs. We hypothesize that, to deal with these challenges, partners will often choose at least one partner with a noncommercial orientation and prefer other partners from the same country. In addition, we argue that a large proportion of multipartner alliances are likely to involve R&D because the synergies attributable to diverse technological skills might outweigh the anticipated higher transaction costs. Based on analyses of 1,235 multipartner alliances formed in the biotechnology industry, we received support for all of our predictions.