Addressing Endogeneity Issues in Alliance Research

This is a draft chapter. The final version is available in Collaborative Strategy: Critical Issues For Alliances And Networks edited by Luiz F. Mesquita, Roberto Ragozzino and Jeffrey J. Reuer, published in 2017, Edward Elgar Publishing Ltd. http://dx.doi.org/10.4337/9781783479580 The material cannot be used for any other purpose without further permission of the publisher, and is for private use only.The ultimate goal of strategy scholars in alliance research is to understand how alliances contribute to firm performance. Empirical researchers face myriad questions about the causal underpinnings of firm performance and learning: How can one disentangle the influence of process and structure on alliance outcomes? To what extent are asymmetries in learning the outcome of alliance design versus partner firms’ inherent capabilities or orientation? What other determinants of partners’ bargaining power affect firms’ decisions about appropriate partners, the design of alliance structures and processes, and ultimately the learning that each firm takes from the alliance? We attempt to crystallize the identification problem in empirical studies of alliance organization and performance, document the evolution from blissful ignorance through dawning awareness to growing methodological sophistication in alliance research published in key strategy and organizations journals, and offer some thoughts on useful trajectories for future work.Research for this paper was supported by the Social Science and Humanities Research Council (SSHRC Grant # 435‐2013‐0084).