Technological joint venture formation under the real options approach

Isabel Estrada, Gabriel de la Fuente, Natalia Martín-Cruz
2010 Research Policy  
Drawing on the real options approach, we analyse which factors motivate firms to choose technological joint venture formation as their technology strategy. Scholars researching joint ventures through the real options lens have usually focused on the ending stage of the alliance rather than on its formation. Using a panel of 29 376 observations from 4050 manufacturing firms operating in Spain between 1998 and 2005, our results are consistent with real options approach predictions. We find that
more » ... e greater the firm's absorptive capacity and the higher the degree of technological risk, the more likely the firm is to form a technological joint venture. Results also suggest that the greater the risk of pre-emption by rivals and the higher the opportunity costs associated with technological joint venture formation, the less likely the firm is to choose such a technology strategy. A further step towards bridging the gap between finance theory and strategic analysis is thus taken.
doi:10.1016/j.respol.2010.05.015 fatcat:krxhdzr7cvhmlgp2uszahknx7u