The Influence of Institutional Differences on Control Mechanisms in Alliances

ABSTRACT Cross-border alliances expose firms to heightened risks, posing different governance and control challenges than domestic alliances. We examine the impact of differences in alliance partner countries' institutional environments. Analysis survey data supports our contention that cross-border involve a greater reliance on formal controls, particularly when collaborate with partners countries weaker environment. These relations exist regardless structure (i.e., equity or non-equity alliance) prior research considers critical choice for addressing risks. Additional analyses show four subdimensions characteristics (voice accountability, regulatory quality, rule law, corruption) one subdimension controls (behavior controls) are main drivers association between distance controls. findings demonstrate distinct environment as country-level determinant choices. Data Availability: Due confidentiality agreements respondents, cannot be released publicly. JEL Classifications: D23; D82; L22; M4.