Costs of partner search and selection in strategic alliances

This study examines the costs of alliance partner search and selection and their antecedents. Drawing on transaction cost economics and the network perspective on inter-organizational relationships, the findings drawing on survey-based data from a sample of 83 firms in the German telecommunications industry reveal that partner search and selection costs are closely connected but differentially affected by task- and company-related factors. When firms must make alliance-specific investments, search and selection costs increase. A firm’s number of current alliances decreases them, while neither alliance scope nor firm performance significantly affect search and selection costs. Additional analyses show that alliance-specific investments especially increase search costs but do not affect selection costs, while the initiating firm’s performance decreases search costs but it does not reduce selection costs