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Please use this identifier to cite or link to this item: http://hdl.handle.net/1942/1759

Title: Choosing governance modes for external technology sourcing
Authors: van de Vrande, V.
Lemmens, C.
Issue Date: 2006
Publisher: Blackwell
Citation: R&D Management, 36(3). p. 347-363
Abstract: This study examines the effect of uncertainty on governance mode choice of interfirm relationships in new business development (NBD). We combine transaction cost economics and real options reasoning, arguing that in the early stages of NBD, where technological and market uncertainty are very high, companies are better off using governance modes that are reversible and involve a low level of commitment. When uncertainty has decreased as a result of prior R&D investments, transaction costs considerations become dominant and companies will shift towards governance modes that are less reversible and more hierarchical. We argue that technological distance leads to less hierarchical governance modes and prior cooperation between firms leads to subsequent choices for more hierarchical modes. Finally, we propose that higher exogenous uncertainty leads to less hierarchical governance modes.
URI: http://hdl.handle.net/1942/1759
DOI: 10.1111/j.1467-9310.2006.00434.x
ISI #: 000237814400010
ISSN: 0033-6807
Category: A1
Type: Journal Contribution
Validation: ecoom, 2007
Appears in Collections: Research publications

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