Innovative Performance of Alliance Block Members under Different Levels of Technological Turbulence

Abstract

The primary goal of this paper is to improve our understanding of the complex relationship between the positioning of companies in alliance networks and their innovative performance. We expect that a firm's innovative performance depends partly on its position in specific network settings(block membership or non-block membership), with additional effects caused by the nature of the technological turbulence(incremental vs.disruptive) in its environment. In our empirical analysis of 135 companies in the international microelectronics industry, we find evidence that there is a positive relationship between alliance block membership, the duration of this block membership and the innovative performance of companies in environments characterized by incremental and more disruptive technological change. However, at very high levels of technological turbulence, alliance block membership becomes a liability and companies that operate outside these alliance blocks start to outperform alliance block members.