Performance of Cooperative Alliance: An Integrative Model from the Perspectives of Transaction Cost, Social Capital, And National Culture

Cooperative alliance has been a popular governance form other than pure markets and hierarchies in the contemporary international business world. With or without equity sharing, firms form cooperative alliances with domestic or international partners, aiming to gain synergies to create better performance than by using arm's-length transactions or their own internal competitive advantages. This paper proposes an integrative model from the perspectives of transaction cost and social capital theories as a means to find the direct and indirect determinants of cooperative alliance performance. National culture is specified as an indirect factor of influence in the following alliance performance determinants: exchange attributes, governance structures, and coordination mechanisms. Propositions and managerial implications are provided as a major contribution of this paper.