Around one third of global corporate revenues comes directly from some form of nonoperated business, be it partnership, alliance or joint venture, and this trend is forecast to continue. Joint ventures are big business and both partners hope to gain. An historical example is the now-defunct joint venture between Toyota and General Motors (GM) established back in 1985. Toyota intended to gain insights into the auto market in the United States through GM, while GM took the alliance as a chance to learn Toyota's lean manufacturing practices. So, when competitors form alliances, who gains most?
In a recent article "Asymmetric learning capabilities and stock market returns'" published at the Academy of Management Journal in 2015, Professor Haibin Yang of the Departments of Management and Marketing along with his coauthors analyzed over 600 R&D alliances in the U.S. computing and biopharmaceutical industries from the period 1984‐2003. They find that a firm's relative capability to learn partner-specific know-how holds the key to understanding the learning race phenomenon and its performance consequences. A firm with higher specific learning capability relative to its partner's will be rewarded with superior stock performance. They also find that equity alliance governance and market similarity between partners moderate this relationship in opposite directions. Equity alliance governance motivates firms to suppress competitive learning and thus reduces the positive impact of the specific learning capability gap on abnormal stock returns, while market similarity between partners aggravates the learning race and strengthens the positive impact of the specific learning capability gap.
Read more: http://amj.aom.org/content/58/2/356.short
Yang, Haibin, Yanfeng Zheng, and Akbar Zaheer. "Asymmetric Learning Capabilities and Stock Market Returns." Academy of Management Journal 58.2(2015): 356-374. Print.
