In the information age, the firm's performance hinges on combining partners' specialist knowledge to achieve value co-creation. Combining knowledge from different specialties could be a costly process in the international technology alliances (ITAs) context. We argue that the combination of different specializations requires the development of "trans-specialization understanding" (TSU) instead of the internalization of partners' specialist knowledge. This article examines the extent to which inter-firm governance in ITAs shapes TSU, and whether the development of TSU is endangered by cultural distance. We hypothesize that relational governance, product modularity, and cultural distance influence TSU development, which in turn influences firm performance. We collected data from 110 non-equity ITAs between software and hardware firms participating in the mobile device sector. We analyzed the data using partial least squares path modeling. Our findings suggest that TSU largely depends on product modularity and relational governance in alliances. However, while cultural distance negatively moderates the path from relational governance to TSU, it has no effect on the relationship between product modularity and TSU. Based on this, we conclude that product modularity can substitute for relational governance when strong relational norms are not well-developed in international alliances. Thus cultural distance does not invariably amount to a liability in ITAs.
The authors thank the Guest Editor, Lucia Piscitello, and three anonymous reviewers for their insightful comments and suggestions during the review process. We also thank Oded Shenkar and Chang Hoon Oh for their valuable comments on an earlier draft. This work was supported by Hankuk University of Foreign Studies Research Fund. Financial support from the Economic and Social Research Council (ESRC), UK, who funded part of Rudolf Sinkovics’ time [grant number RES-075-25-0028, ESVJ013234V1], is gratefully acknowledged.
- cultural distance
- international technology alliance
- product modularity
- relational governance
- trans-specialization understanding