Entrepreneurial Alliances as Contractual Forms

Advancing upon taxonomical research on interfirm alliances, we investigate the design of entrepreneurial firms’ alliances in more fine-grained terms by focusing on the specific contractual provisions that firms negotiate into their alliance contracts. Drawing upon transaction cost arguments, we examine the determinants of the contractual complexity of collaborative agreements in the German telecommunications industry. The findings reveal that alliance contracts vary greatly in their complexity, yet contracts for non-equity alliances tend to be no more or less complex than those for equity alliances on average, which challenges the view that the latter unambiguously afford firms greater control than the former. Furthermore, multivariate findings on the roles of transaction-specific investment, relational capital, search costs, and so forth demonstrate that firms’ contractual and governance choices have distinct antecedents.