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Publications
  • June 2013
  • Article
  • Academy of Management Journal

Signals across Multiple Networks: How Venture Capital and Alliance Networks Affect Interorganizational Collaboration

By: Umit Ozmel, Jeffrey J. Reuer and Ranjay Gulati
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Abstract

In this paper, we examine the contingent effects of signals generated by different types of networks on new ventures' formation of future strategic alliances. We argue that the signaling value of a given tie in reducing adverse selection is more pronounced when another type of tie is lacking. In particular, we suggest that signals associated with (i) a new venture's affiliations with venture capitalists (VCs) that have prominent positions in syndicate networks and (ii) a new venture's prominent position in alliance networks resulting from previous alliances offer redundant benefits. As a result, the positive effect of VC prominence in determining a new venture's future alliance formation diminishes as the new venture's prominence in alliance networks increases. Evidence from biotech alliances between new ventures and established companies provides support for our theory.

Keywords

Networks; Venture Capital; Alliances

Citation

Ozmel, Umit, Jeffrey J. Reuer, and Ranjay Gulati. "Signals across Multiple Networks: How Venture Capital and Alliance Networks Affect Interorganizational Collaboration." Academy of Management Journal 56, no. 3 (June 2013): 852–866.
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About The Author

Ranjay Gulati

Organizational Behavior
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