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Choosing innovation alliance governance structure: The roles of performance feedback and top management team characteristics

Published online by Cambridge University Press:  03 June 2024

Taoyong Su ,
Yongheng Chen ,
Wei Liu Open the ORCID record for Wei Liu [Opens in a new window]  and
Junzhe Ji
Taoyong Su
Affiliation:
School of Economics and Management, Tongji University, Shanghai, China
Yongheng Chen
Affiliation:
School of Finance and Business, Shanghai Normal University, Shanghai, China
Wei Liu*
Affiliation:
School of Economics and Management, Tongji University, Shanghai, China
Junzhe Ji
Affiliation:
Adam Smith Business School, University of Glasgow, West Quadrangle, Glasgow, UK
*
Corresponding author: Wei Liu; Email: weiwl@tongji.edu.cn
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Abstract

While the importance of innovation alliance for high-technological firms is well-documented, existing literature provides little guidance on the role of performance feedback in an alliance governance structure choice. Drawing on performance feedback theory, this study sheds light on the association between performance deviating (either above or below) from firms’ social aspirations and the governance structure choice of innovation alliances. Using an unbalanced panel of Chinese biopharmaceutical firms spanning from 2007 to 2020, we find that firms experiencing negative performance feedback prefer a non-equity innovation alliance structure, whereas those with positive performance feedback are more likely to adopt an equity one. The strength of these relationships is contingent on top management team average tenure and educational-level diversity. Our findings both provide theoretical and practical insights into guiding how firms under different states of performance feedback select alliance governance structures.

Keywords

performance feedbackinnovation alliance governance structureequity and non-equityTMT tenureTMT educational-level diversity

Information

Type
Research Article
Information
Journal of Management & Organization , Volume 31 , Issue 2 , March 2025 , pp. 602 - 624
Copyright
© The Author(s), 2024. Published by Cambridge University Press in association with Australian and New Zealand Academy of Management.

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