Interaction of Alliance and Technology Networks: The Case of Global Chemical-Pharmaceutical Industry

This paper proposes a model which predicts the propensity of any pair of firms to form an alliance, based on their position in alliance and technology networks. Juxtaposing alliance network with technology network enables us to investigate the interaction of the two. This study in a global industry network also enables us to ask whether location of the partners, in different countries, made alliances more likely, or less likely. Results from a sample of 103 firms (from the "triad" regions of the U.S., Japan and Europe), over a 11 year period, in the chemical and pharmaceutical sector suggest that the interaction of alliance and technology networks, and partner location explain the propensity of a pair of firms to form an alliance.