Technological flows and choice of joint ventures in technology alliances

This paper analyses the influence of technological flows in the choice of joint ventures as a governance form of technology alliances, using a theoretical framework based on Transaction Costs Economics and the Economics of Intellectual Property Rights. We argue that the formation of a joint venture is only necessary in situations for which technological flows make the monitoring of alliance activities and the distribution of cooperation rents difficult. Our hypotheses have been confirmed using a sample of technology alliances created by companies from the European Union between 1992 and 1999.