The Role of Market Identity on the Relationship Between Knowledge and Strategic Alliances

We report a study exploring the effects of the interplay between a firm’s knowledge structure characteristics and its market identity - as reflected in its position in the industry value chain and social prominence – on its ability to form knowledge-based strategic alliances. We situate our study in an emerging industry, the global fuel-cell industry. We find that a firm’s ability to form alliances is affected by the alignment (and mis- alignment) between its knowledge structure characteristics (namely, depth and scope) and its position in the value chain. We also find that while a firm’s social prominence can amplify the positive effects of alignment, thereby enhancing a firm’s alliance formation propensity, being prominent can also hurt a firm when it faces a misalignment between its knowledge structure characteristics and its value chain position. Our study helps in developing a richer understanding of the relationship between a firm’s knowledge-based resources and its ability to form strategic alliances.