Summary: Institutional environment and the mechanisms of governance: the impact of intellectual property protection on the structure of inter-firm alliances.
Oxley wants to examine how institutional environment and transaction characteristics affect governance of inter-firm alliances. She focuses on the choice between equity and contractual alliance forms under differing regimes of intellectual property protection and other national institutional features. The dependent variable represents the partner firms’ choice of governance structure for the alliance. The population of interest in the study is horizontal technology transfer alliances linking U.S and non-U.S based firms. The sample is drawn from the Cooperative Agreements and Technology Indicators information system.
The hypotheses represented in the article link transaction characteristics and elements of the institutional environment to the governance structure of the alliance. The first hypotheses represent the independent country- level variable, where the central interest is the national appropriability regime. H1 is that the degree of hierarchical control in alliances between U.S and non- U.S firms is inversely related to the strength of intellectual property protection (i.e., the appropriability regime) in the foreign country, ceteris paribus. The hypothesis is being supported by the data collected. This then suggest that US firms are more likely to organize an alliance as an equity joint venture when the partner is from a country where intellectual property protection is weak.
The next two hypotheses describe the predicted impact on governance mode of the specification and monitoring difficulties rooted in transaction- level characteristics. H2 says that the degree of hierarchical control in alliances between U.S and non- U.S firms will be greater for transactions where specification of property rights is difficult (e.g. where asset creation or substantial modification is involved, or where the...