Essays of Strategic Alliance Portfolio Configuration

169 Pages·2017·1.42 MB·English

Florida International University
FIU Digital Commons
FIU Electronic Theses and Dissertations University Graduate School
6-28-2012
Essays of Strategic Alliance Portfolio
Configuration— Its Performance Properties,
Strategic Antecedents and Consequential Effects
on Multinational Firms’ Continuing Foreign
Expansion
Wei He
Florida International University, [email protected]
DOI:10.25148/etd.FI12080620
Follow this and additional works at:https://digitalcommons.fiu.edu/etd
Recommended Citation
He, Wei, "Essays of Strategic Alliance Portfolio Configuration— Its Performance Properties, Strategic Antecedents and Consequential
Effects on Multinational Firms’ Continuing Foreign Expansion" (2012).FIU Electronic Theses and Dissertations. 697.
https://digitalcommons.fiu.edu/etd/697
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FLORIDA INTERNATIONAL UNIVERSITY
Miami, Florida

ESSAYS ON ALLIANCE PORTFOLIO CONFIGURATION—ITS PERFORMANCE
PROPERTIES, STRATEGIC ANTECEDENTS AND CONSEQUENTIAL EFFECTS
ON MULTINATIONAL FIRMS’ CONTINUING FOREIGN EXPANSION

A dissertation submitted in partial fulfillment of the
requirements for the degree of
DOCTOR OF PHILOSOPHY
in
BUSINESS ADMINISTRATION
by
Wei He

2012
To: Dean Joyce Elam
College of Business Administration

This dissertation, written by Wei He, and entitled Essays of Strategic Alliance Portfolio
Configuration— Its Performance Properties, Strategic Antecedents and Consequential
Effects on Multinational Firms’ Continuing Foreign Expansion, having been approved in
respect to style and intellectual content, is referred to you for judgment.

We have read this dissertation and recommend that it be approved.

___________________________________
Joseph West

___________________________________
William Schneper

___________________________________
William Newburry

___________________________________
Sumit Kundu, Co-Major Professor

___________________________________
Jinlin Zhao, Major Professor

Date of Defense: June 28, 2012

The dissertation of Wei He is approved.

___________________________________
Dean Joyce Elam
College of Business Administration

___________________________________
Dean Lakshmi N. Reddi
University Graduate School

Florida International University, 2012
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ACKNOWLEDGMENTS
First and most important, I am immensely grateful to all of my five dissertation
committee members for their guidance, advice, and encouragement during the entire
process of writing this dissertation. I have been extremely lucky to have advisors who not
only have great knowledge on a broad range of disciplines, but also provide wholehearted
support for my research. I would like to express my deep respect and gratitude to my two
major advisors: Dr. Jinlin Zhao and Dr. Sumit Kundu. Over the past seven years, Dr.
Zhao has always been available when I needed help and input from him. He did not only
guide me on the correct direction of completing coursework and doing research, but also
offered me tremendous help in terms of scholarship development. I owe a great debt of
gratitude to Dr. Kundu, co-chair of my dissertation committee, who has consistently
provided me outstanding support and advice on my research works as well as career
development plans since the beginning of this journey. Especially, under Dr. Kundu’s
support I obtained the data source of strategic alliances, without which this dissertation
would not have been possible.
I am indebted to Dr. Joseph West, who provided me great comments on refining
my research framework. I was truly blessed to have his support for the opportunity of
pursuing the Ph.D. degree that opens up my academia career. I also would like to express
my thanks to Dr. William Schneper, for his invaluable suggestions and comments on the
conceptualization of my theoretical framework at the final stage of my dissertation
development. I owe many thanks to Dr. William Newburry, who offered me critical
advice on the topic selection for this dissertation at the beginning stage of this journey.
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I wish I can dedicate this dissertation to my parents, who always encourage me to
achieve at the higher level in all research that I do. They provide both material and
spiritual support to me throughout every stage of my life. I thank them for their non-
substitutable roles in shaping and strengthening my confidence in the meaning of what I
am doing. I also want to thank my sister who, although having a busy life herself,
consistently drives me to build positive attitudes towards my study, my research and my
future life throughout the entire Ph.D. program over the past six years.
Furthermore, my special gratitude goes to my wife Kun Yang. Studying in the
same Ph.D. program, she has lived through with me the entire process of my dissertation
development and has always been understanding, supportive, and motivating. Her
consideration, patience and tolerance during the final stage of this project were invaluable
to the completion of my research. This work would not have been completed without her
remarkable investment of her strength, understanding and love.
I would like to acknowledge my colleague Mr. Watcharaphong Leartsurawat, who
did a great job of explaining and transferring to me the background knowledge about the
marketing practices of strategic alliances from a consumer’s perspective. This helped
significantly in triggering my original interests of carrying out this research.
Finally, I want to express my genuine gratitude to my cohort—Abrahim
Soleimani, Armando Borda, Sokol Celo, Abdul Beyd, and Yukai Wang, for their
encouragement, inspiration and insightful academic support throughout the entire Ph.D.
journey.

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ABSTRACT OF THE DISSERTATION
ESSAYS ON ALLIANCE PORTFOLIO CONFIGURATION—ITS PERFORMANCE
PROPERTIES, STRATEGIC ANTECEDENTS AND CONSEQUENTIAL EFFECTS
ON MULTINATIONAL FIRMS’ CONTINUING FOREIGN EXPANSION
by
Wei He
Florida International University, 2012
Miami, Florida
Professor Jinlin Zhao, Major Professor
Professor Sumit Kundu, Co-Major Professor
This dissertation focused on an increasingly prevalent phenomenon in today’s
global business environment—strategic alliance portfolio. Building on resource-based
view, resource dependency theory and real options theory, this dissertation adopted a
multi-dimensional perspective to examine the performance implications, strategic
antecedents of alliance portfolio configuration, and its strategic effects on firms’
decision-making on their continuing foreign expansion.
The dissertation consisted of three interrelated essays, each of which dealt with a
specific research question. In the first essay I applied a two-dimensional construct that
embraces both alliance relations’ and alliance partners’ attributes to illustrate alliance
portfolio configuration. Based on this framework, a longitudinal study was conducted
attempting to explore the performance properties of alliance portfolio configuration. The
results revealed that alliance diversity and partner diversity have different relative
contributions to firms’ economic performance. The relationship between alliance
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portfolio configuration and firm performance was shaped by degree of multinationality in
a curvilinear pattern. The second essay attempted to identify the firm level driving forces
of alliance portfolio configuration and how these forces interacting with firms’
internationalization influence firms’ strategic choices on alliance portfolio configuration.
The empirical results indicated that past alliance experience, slack resource and firms’
brand images are three critical determinants shaping alliance portfolios, but those shaping
relationships are conditioned by firms’ multinationality. The third essay primarily
employed real options theory to build a conceptual framework, revealing how country-,
alliance portfolio-, firm-, and industry level factors and their interactions influence firms’
strategic decision-making on post-entry continuing expansion in foreign markets. The
two empirical studies were resided in global hospitality and travel industries and use
panel data to test the relevant theoretical models.
Overall, the dissertation advanced and enriched the theoretical domain of alliance
portfolio. It particularly shed valuable insights on three fundamental questions in the
domain of alliance portfolio research, namely “if and how alliance portfolios contribute
to firms’ economic performance”; “what determine the appearance of alliance portfolios;
and “how alliance portfolios affect firms’ strategic decision-making”. This dissertation
also extended the international business and strategic management research on service
multinationals’ foreign expansion and performance.

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TABLE OF CONTENTS
CHAPTER PAGE
Chapter 1: Introduction ....................................................................................................... 1

Chapter 2. Essay One: Strategic Alliance Portfolio Configuration and Firms’ Financial
Performance—A Two-Dimensional Analysis in the International Hospitality and Travel
Industry ............................................................................................................................. 12
2.1 INTRODUCTION ................................................................................................... 12
2.2 LITERATURE REVIEW ........................................................................................ 14
2.2.1 Defining Strategic Alliance Portfolio ............................................................... 14
2.2.2 Strategic Alliance Portfolio and Firm Performance ......................................... 16
2.2.2.1 Performance outcomes and alliance portfolio attributes ............................ 16
2.2.2.2 Theoretical perspectives applied ................................................................ 18
2.2.2.3 Theoretical background of alliance portfolio diversity—firm performance
relationship ............................................................................................................. 20
2.2.3 One-Dimensional versus Two-Dimensional Framework of Alliance Portfolio
Configuration ............................................................................................................. 24
2.3 THEORY AND HYPOTHESES ............................................................................ 27
2.3.1 Illustration of Two-Dimensional Typology of Strategic Alliance Portfolio
Configuration ............................................................................................................. 27
2.3.2 Dimensional Diversity and Firm Performance ................................................. 31
2.3.3 Effects of Alliance Portfolio Configuration Strategies on Firm Performance . 37
2.3.4 Contextual Effects of Internationalization ........................................................ 40
2.4 RESEARCH METHODOLOGY ............................................................................ 43
2.4.1 Research Setting and Sampling ........................................................................ 43
2.4.2 Data Collection ................................................................................................. 44
2.4.3 Variables and Measures .................................................................................... 46
2.4.4 Data Analysis .................................................................................................... 50
2.5 FINDINGS .............................................................................................................. 52
2.6 DISCUSSION AND IMPLICATIONS .................................................................. 61
2.7 CONCLUSION ....................................................................................................... 69

Chapter 3. Essay Two: Strategic Antecedents of Alliance Portfolio Configuration—An
Empirical Study Based on A Two-Dimensional Based Approach ................................... 71
3.1 INTRODUCTION ................................................................................................... 71
3.2 LITERATURE REVIEW ........................................................................................ 73
3.2.1 Emergence and Formation of Alliances ........................................................... 73
3.2.2 Emergence and Antecedents of Alliance Portfolio ........................................... 76
3.3 THEORY AND HYPOTHESES ............................................................................ 79
3.3.1 Alliance Management Experience and Alliance Portfolio Configuration. ....... 80
3.3.2 Brand Image and Alliance Portfolio Configuration. ........................................ 83
3.3.3 Slack Resource and Alliance Portfolio Configuration. .................................... 85
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3.3.4 Moderating effect of Internationalization on Alliance Portfolio Configuration.
................................................................................................................................... 87
3.4 METHODOLOGY .................................................................................................. 89
3.4.1 Research Setting and Sampling ........................................................................ 89
3.4.2 Data Collection ................................................................................................. 90
3.4.3 Variables and Measures .................................................................................... 91
3.4.4 Data Analysis .................................................................................................... 95
3.5 FINDINGS .............................................................................................................. 99
3.6 DISCUSSION ....................................................................................................... 101
3.7 CONCLUSION ..................................................................................................... 104

Chapter 4. Essay Three: Alliance Portfolio Configuration and Multinational Firms’
Continuing Foreign Expansion—A Real Options Perspective ....................................... 107
4.1 INTRODUCTION ................................................................................................. 107
4.2 CONCEPTUAL BACKGROUND ....................................................................... 108
4.2.1 Post-Entry Continuing Foreign Expansion ..................................................... 108
4.2.2 Real Options Theory ....................................................................................... 112
4.3 THEORY AND PROPOSITIONS ........................................................................ 114
4.3.1 Exogenous Uncertainty and Continuing Foreign Expansion ......................... 114
4.3.2 Endogenous uncertainty and firms’ continuing foreign expansion ................ 117
4.3.3 Irreversibility and Firms’ Continuing Foreign Expansion ............................. 119
4.3.4 Managerial Discretion and Continuing Foreign Expansion ........................... 123
4.4 Conclusion ............................................................................................................. 125

Chapter 5. Concluding Remarks ..................................................................................... 127
5.1 SUMMARY OF KEY FINDINGS ....................................................................... 127
5.2 THEORETICAL CONTRIBUTIONS .................................................................. 128
5.3 EMPIRCIAL CONTRIBUTIONS ........................................................................ 131
5.4 MANAGERIAL IMPLICATIONS ....................................................................... 133
5.5 LIMITATIONS AND FUTURE RESEARCH ..................................................... 134

References ....................................................................................................................... 137

VITA ............................................................................................................................... 157

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LIST OF TABLES
Table 2-1: Summary of Selected Main Study on the Effects of Alliance Portfolio
Diversity on Firm Performance ........................................................................................ 22
Table 2-2: Descriptive Statistics and Correlations for Essay One .................................... 51
Table 2-3: Baseline Models with Control Variables......................................................... 52
Table 2-4: Effects of Dimensional Alliance Portfolio Diversity on Firm Performance ... 54
Table 2-5: Performance Properties of General portfolio Diversity and Strategic Alliance
Portfolio Configuration ..................................................................................................... 57
Table 2-6: Moderating Effects of Multinationality on Portfolio Diversity--Financial
Performance Relationship ................................................................................................. 59
Table 3-1: Correlations and Descriptive Statistics for Essay Two ................................... 96
Table 3-2: Baseline Models and Control Variables .......................................................... 97
Table 3-3: Results of Logit Regressions ........................................................................... 98
Table 5-1: Summaries of Empirical Research Results ................................................... 127

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