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The impact of different forms of IPO firm legitimacy on the choice of alliance governance structure

Published online by Cambridge University Press:  02 February 2015

Joseph E Coombs ,
Paul E Bierly III  and
Scott Gallagher
Joseph E Coombs
Affiliation:
School of Business, Virginia Commonwealth University, Richmond, VA, USA
Paul E Bierly III
Affiliation:
James Madison University, College of Business, Harrisonburg, VA, USA
Scott Gallagher
Affiliation:
James Madison University, College of Business, Harrisonburg, VA, USA
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Abstract

We analyze the effects of four different types of firm legitimacy – managerial, technological, local community legitimacy and business press endorsement – on the choice of alliance governance structure in partnerships with newly public biotechnology firms. We expand current research to differentiate between non-equity, minority equity and joint venture alliance structures. We find that initial public offering of stock (IPO) firms with higher levels of managerial legitimacy and local community legitimacy are more likely to enter into joint ventures than minority equity alliances and non-equity alliances. IPO firms with higher technological legitimacy and business press endorsement are more likely to use a less hierarchical governance structure.

Keywords

firm legitimacystrategic alliancesalliance governance structure
Type
Research Article
Information
Journal of Management & Organization , Volume 18 , Issue 4 , July 2012 , pp. 516 - 536
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2012

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