Chapter 6: Sequence of Alliance Ownership Structure: Concepts and Evidences

We introduce here a novel concept in the management literature—sequence—and apply it to evolution of ownership (or equity share) structures in equity alliances.¹,² In equity alliances, share changes through partners’ equity acquisitions or divestments are a fairly widespread phenomenon (Bleeke & Ernest, 1995; Dussauge, Garrette, & Mitchell, 2000; Hennart,Kim, & Zeng, 1998). Even after the inception of alliances, by changing ownership distributions, partners may increase or decrease their equity share ex post or may ultimately terminate their alliance. In practice, moreover, partners can increase or decrease their equity share through a sequence of several steps, and may also iterate between increase and decrease of share with their partners. By examining the process of ownership change among partners, we seek to identify sequential patterns of change and to explore the underlying forces that drive these patterns.