Disentangling Reputational Effects in Alliances

Costa, AA; Costa, LA; Vasconcelos, L

Disentangling Reputational Effects in Alliances

Costa, AA Costa, LA Vasconcelos, L

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Publisher:: Institute for Operations Research and the Management Sciences (INFORMS)
Publication Type:: Journal Article
Citation:: Strategy Science, 2022
Issue Date:: 2022-09-22

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Field	Value	Language
dc.contributor.author	Costa, AA
dc.contributor.author	Costa, LA
dc.contributor.author	Vasconcelos, L
dc.date.accessioned	2023-01-21T02:36:38Z
dc.date.available	2023-01-21T02:36:38Z
dc.date.issued	2022-09-22
dc.identifier.citation	Strategy Science, 2022
dc.identifier.issn	2333-2050
dc.identifier.issn	2333-2077
dc.identifier.uri	http://hdl.handle.net/10453/165318
dc.description.abstract	<jats:p> An important consequence of an alliance is that partnering firms combine their reputations by associating them to jointly implemented projects. However, an often-overlooked aspect is that those reputations may themselves change due to both the announcement of the firms’ decision to form the alliance and the performance of joint projects. We develop a formal model that provides an integrated perspective of these reputational effects, while allowing us to isolate and characterize each of them. We find that the way in which the firms’ competence levels affect their decision to form an alliance determines how the firms’ reputations evolve following the announcement of the alliance and the performance of joint projects. This indicates that the analysis of the reputational effects of an alliance requires understanding the firms’ alliance formation decision in the first place. We show, for instance, that a firm’s reputation may decrease following the decision to form an alliance, and that the impact of project performance on the reputations of alliance partners can be very asymmetric. Among other things, our analysis implies that a firm’s desirability as an alliance partner does not necessarily increase with its reputation and level of competence. </jats:p>
dc.language	en
dc.publisher	Institute for Operations Research and the Management Sciences (INFORMS)
dc.relation.ispartof	Strategy Science
dc.relation.isbasedon	10.1287/stsc.2022.0175
dc.rights	info:eu-repo/semantics/openAccess
dc.title	Disentangling Reputational Effects in Alliances
dc.type	Journal Article
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	open_access	*
dc.date.updated	2023-01-21T02:36:36Z
pubs.publication-status	Published online

Abstract:

An important consequence of an alliance is that partnering firms combine their reputations by associating them to jointly implemented projects. However, an often-overlooked aspect is that those reputations may themselves change due to both the announcement of the firms’ decision to form the alliance and the performance of joint projects. We develop a formal model that provides an integrated perspective of these reputational effects, while allowing us to isolate and characterize each of them. We find that the way in which the firms’ competence levels affect their decision to form an alliance determines how the firms’ reputations evolve following the announcement of the alliance and the performance of joint projects. This indicates that the analysis of the reputational effects of an alliance requires understanding the firms’ alliance formation decision in the first place. We show, for instance, that a firm’s reputation may decrease following the decision to form an alliance, and that the impact of project performance on the reputations of alliance partners can be very asymmetric. Among other things, our analysis implies that a firm’s desirability as an alliance partner does not necessarily increase with its reputation and level of competence.

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http://hdl.handle.net/10453/165318