When do birds of different feathers fly together? Impact of knowledge structure on alliance formation

An important reason for forming technological alliances is to learn from partners. In choosing partners for such alliances, firms face an important dilemma. If a partner firm has dissimilar knowledge then the focal firm may not have the requisite absorptive capacity. At the same time, the partner needs to be dissimilar such that there is potential for learning. We suggest that dissimilarity in how the two firms combine or couple their knowledge elements along with similarity in their knowledge elements is an important way in which these opposing requirements can be met. We test our hypotheses on U.S. semiconductor firms using patent data from 1989 to 2000. Our results indicate that dissimilarities in couplings have a significant impact on the likelihood of formation of alliances