MNC–SME strategic alliances — A model framing knowledge value as the primary predictor of governance modal choice

This paper addresses a deficit in research on strategic alliance formation which, as noted by Gulati (1998) [Gulati, R., 1998. Alliances and networks. Strategic Management Journal 19, 293–317], has resulted in little attention being given to transaction costs and knowledge-based imperatives for alliance formation. In addition, Contractor and Ra (2002) [Contractor, F.J., Ra, W., 2002. How knowledge attributes influence alliance governance choices: a theory development note. Journal of International Management 8, 11–27] illustrated that theory on governance modal choice from the perspective of transactions costs and knowledge characteristics is underdeveloped, thereby proposing an interactive model predicting governance modal choice in an attempt to redress this imbalance. Using a multiple case study methodology the present study examines the important aspects of governance mode and knowledge exchange in strategic alliances between a multi-national corporation (MNC) and small and medium enterprises (SMEs). In doing so this paper qualifies the model proposed by Contractor and Ra (2002) [Contractor, F.J., Ra, W., 2002. How knowledge attributes influence alliance governance choices: a theory development note. Journal of International Management 8, 11–27], suggesting a model framing knowledge value as the primary predictor of governance modal choice as an appropriate framework to evaluate both the knowledge exchange relationships and governance modal choice relationships between MNCs and SMEs. Thus this paper advances theory on the motives for alliances, specifically, the effect on governance modal choice of a company's desire to acquire or access knowledge. In addition the paper furthers theory on organisational learning and absorptive capacity focusing on their influence on governance mode, in the context of management strategy.     

顾客参与公司治理与公司相互持股的比较研究

通过顾客参与公司治理与公司相互持股的比较研究,从企业战略联盟的角度,得出了顾客参与公司治理实质上是代表了一种新型的企业战略联盟类型——治理权战略联盟——的结论,它与现有的包括公司相互持股在内的股权型战略联盟和契约型战略联盟相比更具生命力和优越性。在当前经济总体上由短缺经济过渡到过剩经济、卖方市场变成买方市场的背景下,通过顾客参与公司治理的形式在供需双方间建立治理权的战略联盟必将成为越来越多企业的现实选择。     

Managing Multiple Facets of Risk in New Product Alliances*

The trend of forming alliances to develop new products continues; however, many of these new product alliances fail. As such we explore how key risk types intrinsic in new product alliances, performance, relational, and knowledge appropriation risks, influence alliance success. Further, we theorize that different alliance governance mechanisms can reduce the negative impact of risks on alliance success. To disentangle possible heterogeneous factors across firms that may affect the interplay of risk assessments and the use of governance mechanisms, we employ latent class regression analysis on survey data collected from 128 new product alliance firms and find support for a two‐regime solution. Longer alliance relationships and lower technological turbulence are factors for some firms (regime one), while the opposite are factors for other firms (regime two). These two regimes show different patterns in the interplay of risk assessments and governance for alliance success. Our theory and results support viewing risk as a multiple‐factor concept and by understanding the different impacts of the risk types in new product alliances and how governance mechanisms mitigate such effects, we aid managers' decision making regarding the balance of contractual versus normative governance in new product alliances. Understanding the heterogeneous factors inherent in these complex relationships enables managers to understand the conditions in which various governance mechanisms promote new product alliance success.     

The Impacts of Alliance Purpose and Partner Similarity on Alliance Governance

It is generally recognized that the governance structure of an alliance has an impact on its probability of success. In this study, we examine the choice between two alternative alliance governance structures: equity and non-equity. Drawing from transaction cost economics, two sets of factors, namely alliance purpose (R&D or marketing) and cultural distance between partners, are hypothesized to influence the above choice. We further hypothesize that collaborative R&D alliances, where both parties contribute technical knowledge, are more likely to lead to the formation of equity alliances than non-collaborative research agreements, where only one partner may be doing the research work. Based on a sample of 2407 alliances formed in the global biotechnology industry, we find partial support for the hypothesized relationships. Specifically, we find that collaborative R&D alliances are more likely to be equity alliances, whereas non-collaborative R&D alliances do not have any impact on the choice of the governance form. We also find that alliances formed with a marketing purpose are less likely to be equity alliances. We did not find any relationship between cultural distance and the choice of equity alliances.     

我国高技术企业联盟治理结构选择的实证研究

本文以交易成本理论和关系契约理论为基础,研究高技术企业战略联盟治理结构.作者运用108个高技术企业战略联盟的样本数据,对本文提出的基本研究假设进行了实证检验.实证结果揭示了交易成本理论和关系契约理论在联盟治理当中的互补作用,也证明了不确定性和伙伴关系是决定联盟治理结构选择的关键因素.最后,作者对实证结果进行了讨论,并指出了进一步的研究方向.     

Cooperation governance mode: an extended transaction cost approach

This paper analyses the cooperation governance mode and possible factors affecting the choice between an equity joint venture and a contractual agreement. Although transaction cost economics (TCE) provides a workable and well-used framework within which to analyse this choice, it only captures the static transaction costs related to the two modes. This has lead to a discussion about dynamic governance costs and possible benefits related to the governance mode. The objective of this paper is to show how this extended framework differs from TCE when determining the appropriate governance mode. We use four factors related to nature of cooperation to contrast these two approaches. We collected empirical data about cooperation in the information and communications technology (ICT) sector in order to find support for these arguments. Estimates based on logistic regression analysis suggest that our dynamic governance cost and benefit perspective really provides valuable complementary insights into the traditional static transaction-cost framework when it is a question of the choice of alliance form.     

Alliance formation issues for knowledge-based enterprises

Inter-firm collaboration among knowledge-intensive firms is increasing as a result of accelerating competition, falling regulatory barriers and rising customer expectations. Resource dependency theory is used to position knowledge as the key resource for the knowledge-based enterprise and to examine the suitability of alliances as a mode of knowledge acquisition and exchange, contrasted particularly with merger and acquisition. The alliance and knowledge literatures are reviewed, and particular attention is paid to the critical alliance formation stage. This stage is reviewed against a research model that posits firm performance in knowledge creation arises from a number of factors, including the motivation for an alliance, partner firm characteristics (the ability to develop and sustain valuable resources; absorptive capacity; combinative capability; experience with alliances; and appropriate design for knowledge exchange), the development of operating structures and norms, and the choice of alliance structure. The paper concludes with suggestions for future research..     

“Good” corporate governance and the quality of internal auditing departments in Italian listed firms. An exploratory investigation in Italian listed firms

One of the most important issue relating to corporate governance reports refers to their ability to provide users with a complete set of information regarding the effective ability of an entity to achieve oversight objectives by the compliance to corporate governance practices required by a specific law or industry code. In addition, other features, such as the quality of the internal auditing function or the sensitivity of top management to issues relating to corporate internal controls and risk management, can also be taken into account when formulating a judgment on the quality of corporate governance practices. Is there an association between the compliance to codes and internal controls effectiveness? We propose to assess the quality of corporate governance through a proxy that considers several characteristics of internal audit departments and combines them to determine an Internal Audit Departments global quality index—IAD Index. To define IAD global quality we consider the effectiveness of an internal audit function analysing its operational aspects. The IAD Index is based on several signalling elements that previous literature assumed as proxies for quality of IADs which are grouped into four pillars: a formal quality index; a static quality index; an activity-related quality index; and a performance-linked quality index. We then test the IAD index on a sample of Italian listed firms and conclude that there are significant associations (positive and negative) between the degree of compliance to some corporate governance regulations for listed firms and the IAD Index for the sample being considered.     

Corporate Governance und Eigenkapitalkosten - Bestandsaufnahme des Schrifttums unter besonderer Ber��cksichtigung des Informationsaspektes und Forschungsperspektiven

The present paper provides an overview of research concerning the relationship between corporate governance and the cost of equity capital. The purpose is to explore whether and to what extent corporate governance attributes manifest in firms?? cost of capital. Since the separation of ownership and control is seen as the starting point for the academic thinking on this issue, the term of corporate governance from a shareholder perspective is discussed in more detail. Apart from this terminological discussion the emphasis of this paper lies on the critical review of theoretical and empirical literature. In conducting this review, empirical concepts measuring the relevant dimensions and their potential limitations are explained. Based on these limitations I suggest opportunities for expanding research on the relationship between corporate governance and cost of equity capital, thereby showing future research directions.     

Equity versus non-equity international strategic alliances involving Danish firms: An empirical investigation of the relative importance of partner and host country determinants

A substantial literature has evolved focusing on the ownership structure of international strategic alliances (ISAs). Most of the relevant studies are theoretical in nature and concentrate on the conceptual factors that influence the choice between equity and non-equity structures. A smaller number of studies provide some empirical evidence on the importance of some of the conceptual factors. The theoretical literature highlights the potential influence of relational capital and transaction costs as determinants of ISA structure; however, there is little empirical evidence on the relative importance of these potential determinants. Moreover, there is only limited and indirect evidence bearing upon the impact of host country governance attributes on ISA ownership structure. In this study, we provide statistical evidence on the importance of potential determinants of governance mode choice for a sample of ISAs involving Danish firms. Our study documents how the determinants of governance mode choice vary in importance depending upon the “quality” of the governance infrastructure of the host country.     

How does globalization affect corporate governance and accountability? A perspective from MNEs

This paper addresses how the global activities undertaken by multinational enterprises (MNEs) in international settings impact corporate governance mechanisms and accountability systems. International corporate governance and accountability research, whether from a political science, economics, finance, or accounting perspective, has thus far predominantly focused on the comparison of corporate governance schemes in different countries and on the investigation of institutional parameters that determine these schemes. Straying from this line of inquiry, this article discusses how globalization at the firm level affects governance and accountability systems at parent- and subsidiary-levels. It emphasizes how an MNE's globalization attributes such as globalization scale, foreign adaptation, global competition, and international experience influence the design of governance mechanisms such as board size, board composition, executive compensation, market discipline, interlocking directorate, ownership concentration, duality and inbreeding, as well as the design of accountability systems such as accounting information, auditing standards, and financial and non-financial disclosures. This article bases its conjectures on information processing and agency theories.     

Exploring information technology governance and control of web site content: a comparative case study

Information technology (IT) governance is a key component of corporate governance. Effective IT governance can support web-based strategic initiatives such as the dissemination of information on corporate web sites. However, the IT governance literature does not provide insights about the role of IT governance in controlling this information. There is also a lack of research in the web-based reporting literature on the important issue of control of web site content. This comparative case study aims to explore the relationships between IT governance and the control of web site content. In doing so, IT governance structures, processes and relational capabilities, as well as web site content control, are first described for each of four cases. Then, profiles of relationships between IT governance and web site content control are identified and key attributes characterizing the profiles are outlined. Findings suggest that IT governance within firms is more developed than the control of web site content. Moreover, IT governance structures, processes and relational capabilities can be related to control of web site content processes. IT governance structures can also be related to control of web site content structures and relational capabilities. This study contributes to the governance, control and web-based reporting literatures as an exploratory step before building a theory of relationships between IT governance and web site content control. Further, the study has practical implications as it enhances the understanding of the role of Boards of Directors, senior executives and internal auditors in IT governance and the control of web site content.     

Ex-post governance in joint ventures: Determinants of monitoring by JV boards of directors

Considerable advances have been made in corporate governance research in recent years and opportunities exist to consider these developments within alliances. We extend the “scope of operations” hypothesis to the domain of joint ventures. This proposition suggests that the monitoring carried out by boards increases when organizations become more complex. The inherent characteristics of JVs generate unique sources of complexity that are currently unexplored in the corporate governance literature. First, we seek to determine their influence on monitoring by using primary data on JV board monitoring. Second, we adopt the size of JV boards as a proxy for monitoring in order to examine whether the determinants of board size and monitoring in fact coincide and to reveal if certain effects are masked by using board size as a simple proxy for monitoring. Doing so enables us to investigate the black-box of what boards actually do as well as extend governance research to other organizational forms. Our findings confirm that the unique characteristics of JVs influence the information needs by the boards resulting in more monitoring by JV directors. Our findings show there is value in bridging alliance theory and the literature on corporate governance research. We also advance practitioner's understanding by providing suggestions on how to structure JV boards in relation to their complexity.     

The relationship between corporate governance and the cost of equity capital. Evidence from the Italian stock exchange

The aim of this paper is to investigate the relationship between corporate governance (CG), in terms of its internal significance, and the cost of equity capital (CEC), based on a sample of companies listed on the Italian Stock exchange on 31/12/2009. We used Italy as a case study mainly because we expect that the key features of the Italian setting in terms of financial markets and corporate governance will impact on the relationship between CG and CEC. On the basis of a literature review, we identify the attributes of internal CG predicted as having a direct effect on CEC. The selected CG attributes (board independence, board size, existence of the audit and the nomination/remuneration committees and independence of board committees) have been used to construct a comprehensive corporate governance quality index for each firm. The CG score, as indicator of CG quality, is the independent variable of the multiple regression equation that brings together CG score and CEC (dependent variable), after controlling for the variables related to the risk. This paper belongs to the current of research regarding the relationship between CG and CEC, and it contributes to the literature dealing with CG and firm value determinants, by providing additional information concerning the impact of CG on another important determinant of firm value, i.e. CEC, in a context, that of Italy, which has not been extensively explored in previous research. The main contribution of the paper hinges on the setting chosen, in terms of how CG and key financial markets features impact on the relationship between CG and CEC offering new insights not previously addressed by literature. The results provide evidence of a significant association between the CG score and the firm’s equity capitalcost, after controlling for differences in the Fama and French (J Financial Econ 33:3-56, 1993) risk factors.     

Financial Reporting,Private Disclosure and the Corporate Governance Role of Financial Institutions

This paper explores how large UK financial institutions (FIs) pursued a private corporate governance agenda with their portfolio companies. It also investigates the role of financial reporting in private and public corporate governance. The case financial institutions argued that the limited quality of public information, especially in financial reports, was a major constraint on their ability to act in fund management and corporate governance roles. However, the financial reporting cycle determined a private institutional and company meeting cycle and this created opportunities for private information collection and for governance influence by FIs. In addition, the perceived limitations of public governance mechanisms such as voting encouraged private governance approaches. As a result, the case financial institutions had the incentive and the means to improve the quality of their sources of corporate information and to obtain a competitive edge over other financial institutions and the market through their direct contact with companies. Despite the limitations of public information, the paper reveals how public disclosure in financial statements and the financial reporting cycle played a central role in corporate governance. Public sources of information were combined with private sources to create a financial institutional knowledge advantage. The institutions used this knowledge to diagnose problem areas in strategy, management quality, and the effectiveness of the board, and their impact on financial performance. The financial reporting cycle meant that the quasi insider financial institution had the access opportunity and the joint public/private insight to influence companies across a wide corporate governance agenda and in a range of corporate circumstances. The case institutions exploited these private access and knowledge advantages for investment purposes and for Cadbury style corporate governance purposes. Thus, the private governance process was critically dependent on the FI knowledge advantage, which in turn relied on both financial reports and private disclosure. This wide ranging governance behaviour by institutions corresponds to recommendations subsequently made by the Hampel report in 1998 concerning UK corporate governance. The paper ends by exploring how the private institutional and company meeting agenda can suggest new directions for financial reporting and public disclosure and how this can further improve public and private corporate governance.     

The impact of corporate governance on auditor choice: evidence from Germany

Statutory audits are only beneficial if the appropriate audit quality is both provided and perceived by the users of audited financial statements. On the one hand, Big 4 audit firms are commonly viewed as producing high quality audits. On the other hand, regulators complain about the high market share of Big 4 audit firms. In this context, it is of interest to examine the drivers of a Big 4 audit firm selection. Despite extensive prior research, there is still a lack of findings form Continental European countries and on the impact of corporate governance on auditor choice. This paper on hand is intended to fill the related research gap. Thus, our study identifies variables that determine the auditor choice of large German listed companies. Based on a sample of 432 firm-year observations for the period 2010–2014, our logistic regression analysis suggests that the corporate governance structure influences auditor choice significantly. Notably, the annual meeting frequency of the audit committee and the size of the supervisory board are positively associated with the engagement of a Big 4 audit firm. However, the meeting frequency of the supervisory board and the compliance to the German corporate governance code are negatively related to the choice of a Big 4 auditor. Additionally, the proportion of female supervisory board members does not exert a significant impact. The results remain stable when the DAX30 observations, for which statutory audits are exclusively performed by Big 4 audit firms, are excluded. The main contribution of our paper is, that it sheds light on the impact of corporate governance variables not analyzed by prior research, like supervisory board characteristics, deviations from a corporate governance code, or the female quota, in a Continental European setting, and that it mainly indicates a complementary relationship. Despite the peculiarities of the German setting, the two-tier corporate governance system and the low level of investor protection, the findings of our study are not only relevant for Germany, since many other Continental European countries are characterized by a similar environment. The study’s findings are of particular interest for regulators when addressing audit market structure problems.     

Corporate governance and management practices: stakeholder involvement, quality and sustainability tools adoption

Local public services are the field in which New Public Management (NPM) and Public Governance issues are most in evidence. The local public services are characterized by the rethinking of the role played by local government in the provision of services. An evolution has taken place. From a traditional configuration in which local public services were managed by local governments they moved to a configuration where a separation has taken place between the local government role (which continues to be the guarantor of the satisfaction of public needs) and the role of local public utilities (LPUs) (responsible for delivering the services). This transformation implies both the delegation of resources and authority to lower organisational levels within the public sector and the reconfiguration of accountability chains between the state institutions and the society. In recent years, an intense debate has developed regarding the introduction of new tools and control systems. Particular attention has been paid to planning and control systems, human resources management systems, and performance management systems, leaving a few pioneers to develop their analysis on corporate governance mechanisms with regard their relationships with both the external (stakeholders) actors and the internal (management) ones. On one hand, the OECD wrote guidelines in order to ensure good corporate governance practices, focusing on relations with stakeholders. On the other hand, the dialogue between corporate governance and stakeholders has been already tackled by a number of International organizations guidelines or principles, following a debate on corporate governance that has progressively combined a stakeholder perspective with a more classic shareholder-maximizing model of governance. This article contributes to the debate on the stakeholder involvement process. By means of both a theoretical discussion and an empirical research conducted on 37 Italian LPUs, this paper attempts to analyse specific management tools which can be used to improve the quality of corporate governance in LPUs, by extending the stakeholder involvement. Some NPM’s tools, such as quality standards and sustainability tools imply an effort to offer new forms of organizational behaviour in the decision-making processes (i.e. the choice of the performance indicators and the reporting tools) and to create a dialogue between the enterprise and its stakeholders. In particular, in our study we focus on the adoption of quality standards (ISO 9000 and Customer Satisfaction) and sustainability tools (sustainability reports and ISO 14000 standard) as NPM’s tools to facilitate the stakeholder involvement practices.     

The Impact of Alliance Management Capabilities on Alliance Attributes and Performance: A Literature Review

The literature on alliances has identified a variety of inter‐firm antecedents of performance, including information and knowledge sharing between partners, shared partner understanding, and a focus on collective objectives. Recent studies have focused on alliance management capabilities (AMC) – firms' abilities to capture, share, store and apply alliance management knowledge – as an important antecedent of performance. This paper reviews 90 studies on AMC and makes two important contributions to the literature. First, the review provides an overview of and classification scheme for the different types of AMC to better organise the diverse empirical findings that have been presented in the literature. The novel classification distinguishes between general and partner‐specific AMC and between AMC stored within the firm and within the alliance. Second, consistent with the dynamic capabilities perspective, this paper offers a more detailed understanding of why AMC improve performance, by highlighting the intermediate impact of AMC on alliance attributes. In particular, the review demonstrates how the different categories of AMC influence alliances in terms of information and knowledge‐sharing between partners, shared partner understanding and the pursuit of collective goals. The review also demonstrates that these attributes improve performance. The authors note promising avenues for future empirical research that involve combining the classification scheme with research on the impact of AMC on alliance attributes and performance.     

Disentangling the role of knowledge similarity on the choice of alliance structure

This paper examines the effect of knowledge similarity on the choice of alliance structure in the biotechnology industry. Knowledge similarity between two alliance partners has implications for both integrating and protecting knowledge. Alliance partners have incentives to select the alliance structure that maximizes efficiency in integrating knowledge. Likewise, alliance partners have incentives to select the alliance structure that protects appropriable knowledge. We draw upon the arguments of the knowledge accessing theory and causal ambiguity perspectives as well as the transaction cost economics perspective to predict the role of knowledge similarity on the choice of alliance structure. We empirically test the role of technological overlap and technological component on alliance structures-equity based versus non-equity based. The empirical results show that as technological overlap increases and technological component exists, the probability of equity based alliance structure increases.     

知识权力对技术创新网络治理绩效的影响研究

以中国R&D联盟中的企业为研究对象,将关系质量作为中介变量引入企业知识权力与技术创新网络治理绩效之间,实证研究并分析关系质量在知识权力与网络治理绩效之间的中介作用。研究结果表明,企业间关系质量在知识权力3种类型(专家权、奖赏权与强制权)与网络治理绩效之间具有较强的中介作用,从而证明技术创新网络治理的本质是基于知识权力的网络组织间关系治理。