Internationalization of exploitation alliance portfolios and firm performance

Abstract

Purpose The purpose of this paper is to analyze the impact of alliance portfolio internationalization (API) on firm performance in the context of exploitation alliances. Design/methodology/approach The hypothesis is tested by applying a panel regression using a sample of 64 airlines over a nine years period. Findings As a result, the study finds a U-shaped relationship between API and firm performance. Research limitations/implications The results are particularly relevant for firms using many exploitation (e.g. marketing) alliances. Practical implications In the context of exploitation alliances, managers should focus either on local partners or to take advantage of partners with a high degree of foreignness. Stuck in the middle seems to be not advantageous. Originality/value Previous work found an S-shaped relationship between portfolio internationalization and firm performance while concentrating on exploration alliances. In contrast, this study shows that exploitation alliance portfolios do not experience a decline of firm performance at high levels of portfolio internationalization.