Social Structure and Alliance Formation Patterns: A Longitudinal Analysis

Abstract

This study explores how social structure affects interfirm alliance formation patterns. It proposes that the social context emerging from prior alliances and considerations of strategic interdependence influence partnership decisions between firms. This social network facilitates new alliances by providing valuable information to firms about the specific capabilities and reliability of potential partners. The role of both direct ties between firms and their overall networks were examined with comprehensive longitudinal multi-industry data on the formation of interfirm strategic alliances between 1970 and 1989. Results are consistent with both strategic interdependence and social structural explanations of alliance formation. Support for the interaction of the two sets of factors also emerged. The implications of incorporating both sets of explanations for the formation of interorganizational ties are discussed.