Embedded patterns of international alliance formation

Using a combination of institutional, systems contingency and ecological theory, this paper argues and empirically demonstrates that key founding characteristics of international alliances are embedded (interactively related) in one another. Specifically, the technical area of the alliance activity, the intended direction of product/knowledge flows among sponsors, and the administrative form of the alliances are shown to be interactively related. Further, the concept of embeddedness was combined with Transaction Cost Economics (TCE) and technological views to show two founding patterns. One pattern called Hybridization was consistent with technological explanations while the second called Dominance was suggested by TCE approaches. The new interactive relationships were identified in two large samples involving US, Japanese and European firms during a period from 1970 to 1989.