The Permeability of Network Boundaries: Strategic Alliances in the Japanese Electronics Industry in the 1990s

Abstract

This paper looks at the choice of strategic partners for alliance formation in the Japanese electronics industry during the post-bubble economic period 1992-97. Results from a dyad analysis of 128 companies suggest that firms tend to look for partners within their existing vertical keiretsu networks of organizations for alliances that target the creation of resources that build on existing knowledge (production or distribution) but that this common keiretsu effect disappears for alliances that involve new knowledge creation (new product or technology development). The role of corporate networks, environmental uncertainty and their implications for our understanding of strategic alliance formation and the dynamics of social networks are discussed.