Formation of strategic alliances in high-technology industries: comparative study of the resource-based theory and the transaction-cost theory

In this paper, the resource-based theory and the transaction-cost theory are compared in their suitability to explain firms' formation of strategic alliances under high-technology business environments. Four forms of technology-driven strategic alliances, such as (a) technology license (b) joint R&D (c) sourcing agreement and (d) joint venture, are explained based on the above two theories. Empirical analysis is performed with cases from the semiconductor industry by evaluating the feasibility to use either the resource-based theory or the transaction-cost theory for the explanation of alliance formation. It is recognized that primary motivation of strategic alliances is the access to resources, followed by the shortening of time required for development or marketing. Because the issue of time is rephrased by the issue of resources, it is concluded that the resource-based theory prevails over the transaction-cost theory to explain alliance activities in high-technology industries.