The choice of governance mode in ICT alliances: A property rights approach

We employed a property rights approach to formulate a set of hypotheses explaining the choice between equity and non‐equity alliances in the Information and Communication Technology industry. The firm's need to control knowledge exchange and the resulting innovation makes property rights an important concern permeating partners’ strategic behavior. We showed that equity alliances were preferred, when partners kept a competitive relationship and followed a diversification strategy. However, non‐equity alliances were preferred, when partners exhibited high resource complementarity. Finally, our research indicated that, when alliances targeted innovation development, prior ties between partners positively affected the choice of equity alliances.