Growth dynamics: The bidirectional relationship between interfirm collaboration and business sales in entrant and incumbent alliances

Abstract

This paper demonstrates the existence of bidirectional relationships between interfirm collaboration and business sales. Controlling for factors that influence whether firms form collaborative relationships, the analysis shows that entry and post-entry collaboration often contribute to superior performance, which in turn attracts more partners. However, the performance influences vary across types of collaborators and collaborations, with differences among entrant and incumbent partners, between marketing and R&D partnerships, by partner size, and across time. The empirical analysis examines businesses that operated in the U.S. hospital software systems industry between 1961 and 1991. Copyright © 2005 John Wiley & Sons, Ltd.