Industry determinants of the "exploration versus exploitation" in alliance: the role of incomplete knowledge diversity

Abstract

Drawing on incomplete knowledge diversity and knowledge similarity, we examine the two features of knowledge that affect firms’ alliance decisions. We first look into how incomplete knowledge diversity affects firms’ alliance decisions. Our theoretical premise is that the moderate differences in the incomplete knowledge diversity between firms would provide complementary knowledge to its partner, leading to exploration alliance decisions. This effect is strengthened if firms show similarity in their knowledge. Using alliance data and input-output data during the 2005-2019 period, test our hypotheses of the relationship between two features of knowledge and corporate alliance decisions.