Collaboration across borders: Benefits to firms in an emerging economy

Business firms increasingly engage in collaborative relationships with other firms in order to further their interests (Hergert and Morris, 1988; Hagedoorn, 1995). This phenomenon has attracted considerable academic interest (Contractor and Lorange, 1988; Harrigan, 1988; Kogut, 1988; Osborn and Hagedoorn, 1997). However, the academic attention has been lopsided in that it has been focused predominantly on Western firms. In general, previous research has tended to focus on the multinational corporation’s (MNC’s) perspective and to neglect that of the local partner (Yan and Zeng, 1999). In the case of collaborations between Western firms and their partners in developing or emerging countries this one-sidedness is particularly inappropriate, since in these collaborations differences between the partners’ perspectives often are more pronounced than in collaborations between Western firms (Yan and Luo, 2001, p. 135). But we do not know much about the impact of international collaboration on the performance of partners from emerging economies. However, business collaboration may also be of the utmost importance to these firms. More and more formerly protected markets are gradually opening up to foreign firms, with the effect that indigenous firms have to enhance their strengths to stand up to global competition or perish. This chapter aims to begin to redress the existing asymmetry in the alliance literature by focusing explicitly on the benefits of international collaboration to firms from an emerging economy.