Strategic Alliances

Journal of International Business Studies (2013) 44, 117–137

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Competing globally, allying locally: Alliances between global rivals and host-country factors

Tieying Yu1, Mohan Subramaniam1 and Albert A Cannella Jr2

Management and Organization Department, Carroll School of Management, Boston College, Chestnut Hill, USA; 2Arizona State University, Department of Management, Tempe, USA. Correspondence: T Yu, Management and Organization Department, Carroll School of Management, Boston College, 140 Commonwealth Avenue, Chestnut Hill, MA 02467-3808, USA. Tel: þ 1 617 552 2731

1

Abstract An emerging literature highlights the relationship between competitive intensity and the likelihood that two rival firms will form an alliance. Placing this argument in an international context, we first suggest that the global competitive intensity between two rival multinationals positively affects the likelihood that they will ally in any host country. Additionally, we highlight how a number of host-country contextual factors moderate the relationship between global competitive intensity and alliance formation in a given host country. We test our hypotheses with a sample of 13 global automobile companies operating in 27 countries, and the results largely support our predictions. Journal of International Business Studies (2013), 44, 117–137. doi:10.1057/jibs.2012.37

Keywords: research methods; incorporating country variables; global competition; alliances and joint ventures

Received: 23 November 2010 Revised: 5 December 2012 Accepted: 12 December 2012 Online publication date: 7 February 2013

INTRODUCTION Competition and cooperation may appear paradoxical, but they are often inextricably linked. Competitive pressures between firms frequently induce cooperative behavior (Park & Zhou, 2005), and several studies have predicted that firms might react to intensifying rivalry by partnering with...