Selection rules in alliance formation: strategic decisions or abundance of choice?

Garas, Antonios; Tomasello, Mario V; Schweitzer, Frank
We study how firms select partners using a large database of publicly announced R&D alliances over a period of 25 years. We identify, for the first time, two distinct behavioral strategies of firms in forming these alliances. By reconstructing and analysing the temporal R&D network of 14,000 international firms and 21.000 publicly announced alliances, we find a "universal" behavior in firms changing between these strategies. In the first strategy, newcomers and nodes of low centrality initially establish links to nodes of similar or higher centrality. After these firms have consolidated their position and increased their centrality, they switch to the second strategy, and preferably form links to less central nodes. In addition, we show that \$k\$-core centrality can be established as a measure of firm's success that correlates e.g. with the number of patents (obtained from a dataset of 3 Mio patents). To synthesize our findings, we provide a network growth model based on \$k\$-core centrality which reproduces the strategic behavior of firms, as well as other properties of the empirical network.
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