Dependent variable Corporate-level three-year average of net profit margin (2000-2002 for time point one and 2007 for time point two) is our performance measure. Net profit margin has been used in a number of previous studies to determine firm performance (e.g., Min and Wolfinbarger, 2005) and is useful for comparing corporate performance in the same industry. A lagged three-year average performance in each time period was used to reduce the likelihood of spurious results due to one unusual performance year (Tanriverdi, 2006). Independent and control variables Alliance Portfolio Diversity is a construct that includes partner, functional, and governance diversity. We first coded each individual alliance into different categories. For alliances were coded into 5 categories: for an alliance formed with a Industry Diversity, “4” partner in the same 4-digit SIC code; same 3-digit SIC code; same 2-digit SIC code; “3” “2” “1” same 1-digit SIC code, and sharing no SIC code. For two measures Organizational Diversity, “0” were created to capture two, but related categories. Organizational Diversity I codes alliances for ownership: for same ownership (public-public, private-private); different ownership “1” “0” (public-private, public-government, private-government); Organizational Diversity II codes alliances for organizational level: same organization level (parent-parent, “1” for different Org. level (parent-subsidiary). For we coded “0” Functional Diversity alliances into 4 categories where marketing is manufacturing R&D and Other “1”, “2”, “3”, “4” (other activities that had insufficient numbers to justify individual coding). For Governance we coded each alliance into 6 categories: non-equity, minor equity up to Diversity “1”= “2”= 20%, substantial share 21-49%, share 50%, major share 51-79% and “3”= “4”=equal “5”= share 80+%. “6”=dominant
Dependent variable Corporate-level three-year average of net profit margin (2000-2002 for time point one and for time point two) is our performance measure. Net profit margin has been used in a number of previous studies to determine firm performance (e.g., Min and Wolfinbarger, 2005) and is useful for comparing corporate performance in the same industry. A lagged three-year average performance in each time period was used to reduce the likelihood of spurious results due to one unusual performance year (Tanriverdi, 2006). Independent and control variables Alliance Portfolio Diversity is a construct that includes partner, functional, and governance diversity. We first coded each individual alliance into different categories. For Industry Diversity, alliances were coded into 5 categories: “4” for an alliance formed with a partner in the same 4-digit SIC code; “3” same 3-digit SIC code; “2” same 2-digit SIC code; “1” same 1-digit SIC code, and “0” sharing no SIC code. For Organizational Diversity, two measures were created to capture two, but related categories. Organizational Diversity I codes alliances for ownership: “1” for same ownership (public-public, private-private); “0” different ownership (public-private, public-government, private-government); Organizational Diversity II codes alliances for organizational level: “1” same organization level (parent-parent, “0” for different Org. level (parent-subsidiary). For Functional Diversity we coded alliances into 4 categories where marketing is “1”, manufacturing “2”, R&D “3”, and Other “4” (other activities that had insufficient numbers to justify individual coding). For Governance Diversity we coded each alliance into 6 categories: “1”= non-equity, “2”= minor equity up to 20%, “3”= substantial share 21-49%, “4”=equal share 50%, “5”= major share 51-79% and “6”=dominant share 80+%. 2007
Jiang%20Tao%20and%20Santoro%20SMJ%20Forthcoming-1.docx