Resource type and SME alliance formation: the contingent role of perceived environmental uncertainty

Abstract

PurposeThe aim of the study was to determine how the different types of resources possessed by a small- and medium-sized enterprise (SME), in conjunction with the environmental uncertainty perceived by the SME's managers, affect SME's alliance formation.Design/methodology/approachPersonal interview method was used to collect responses to a survey instrument from Indian SMEs. Logistic regression technique was used to analyze the responses obtained from 127 manufacturing enterprises.FindingsThe study finds that while both tangible and intangible resources possessed by an enterprise positively influence the enterprise's alliance formation, the influence of intangible resources is significantly stronger. The authors also observed the interactive effect between each resource type and environmental uncertainty to be a significant predictor of alliance formation.Research limitations/implicationsThe study does not account for temporal effects such as changes in resources and perceived environmental uncertainty, which may affect alliance formation. Similarly, because the data were obtained from a geographically restricted sample, replication of the study in other geographies may be necessary for generalizing the results.Originality/valueThe paper responds to the call for research to link firm resources and perceived environmental uncertainty toward explaining alliance formation by SMEs. The study went beyond making a distinction between the two types of resources by explicating how the interaction of resource type and environmental uncertainty will affect alliance formation.