The impact of strategic alliance participation on firm growth

Theories explaining the relationship between strategic alliance participation and organisational performance suggest that interfirm collaboration will enable organisations to produce results that otherwise would have been unlikely. However, scholarly research on strategic alliances has frequently produced inconsistent results. Among the reasons results have been inconsistent is that researchers rarely have longitudinal data from multiple alliance partners. In our research, we examined a panel of 49 strategic alliances comprised of 147 firms in Italy over a six-year period. Each strategic alliance was formed midway through the time period, so we could compare each firm’s financial performance before and after joining the alliance. The results show that participation in an alliance is associated with significant positive increases in revenues and assets. These increases in revenues and assets are positively related to the duration of a strategic alliance and negatively related to the number of industries represented within an alliance.