Strategic Alliances and New Product Development: An Empirical Study of the U.S. Semiconductor Start-Up Firms

Article excerpt

INTRODUCTION

A growing number of studies have begun to probe the impact of strategic alliance activities on technological learning and product development (e.g., Brown & Eisenhardt, 1997; Deeds & Hill, 1996; Kotabe & Swan, 1995; Lei, 1997; Mowery, Oxley & Silverman, 1996; Senker & Sharp, 1997; Steensma, 1996). This increased attention is long overdue given the importance of both strategic alliances (Barley, Feeman & Hybels, 1992; Contractor & Lorange, 1988; Gomes-Casseres, 1996; Hamel, Doz & Prahalad, 1989; Moore, 1996; Mowery et al., 1996; Nohria & Eccles, 1992; Ohmae, 1989; Teece, 1992); and new product development (Brown & Eisenhardt, 1995, 1997; Eisenhardt & Tabrizi, 1995; Kotabe & Swan, 1995; Lei, 1997).

So far, our knowledge of the linkage between strategic alliances and product development is still limited. Scholars disagree on whether strategic alliances enable firms to learn and to facilitate product development (e.g., Grant & Baden-Fuller, 1995; Kogut, 1988; Lei, 1997). Empirical studies also present a conflicting picture of the impact of strategic alliances on new product development (e.g., Brown & Eisenhardt, 1997; Deeds & Hill, 1996; Kotabe & Swan, 1995; Mowery et al., 1996).

To untangle the confusion in the extant literature, it is important to differentiate between different sources of learning in strategic alliances. A firm may learn from its alliance partners' organizational capabilities in different functional areas, such as new technologies, marketing skills, and manufacturing abilities (we call this content knowledge and learning). A firm may also gain knowledge from the management process of alliance activities (we call this process knowledge and learning). In the current study we used the difference between content and process learning as a departure point in an effort to extend our understanding of the impact of strategic alliances on new product development.1

Using US semiconductor industry startup firms in the 1980s, we empirically assess the impact of strategic alliances on new product development. This study finds that content learning in technological fields has a positive impact on product development while content learning in manufacturing and marketing areas shows no impact on product development. In addition, this study finds that process learning, measured by the comprehensiveness of alliance activities, appears to enable firms to gain valuable managerial process knowledge and in turn enhance their new product development.

The following section provides a literature review that forms the basis for the theoretical rationale and hypotheses developed in this paper. The method section details the study sample and its relevance and the research strategy. The results section presents empirical findings. The paper concludes with a discussion of the study's findings and future research directions.

In this research, strategic alliances are defined as interfirm collaboration with or without shared equity. Such activities include joint R&D, exchange of technology, second sourcing, manufacturing and marketing agreements or a combination of these. This definition, which excludes trade associations, interlocking directorship, mergers and acquisitions, and governmentsupported joint programs, such as SEMATECH (a semiconductor industry consortium), is consistent with that used in prior studies (e.g., Harrigan, 1986; Pisano and Teece, 1988; Shan, 1990).

LITERATURE REVIEW AND THEORY DEVELOPMENT

Previous studies on strategic alliances point out that turbulent external environments (e.g., Emery & Trist, 1965; McCann & Selsky, 1984), shrinking product life cycles, exploding R&D costs, and the increasing dispersion of skills and knowledge across firms and other organizations (Ohmae, 1989) have heightened the needs for strategic alliances (GomesCasseres, 1996; Hamel et al. …